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20 October 2022

Adding Value to Your Local Tech Ecosystem with Mitchan Adams (Ozow co-founder)

Mitchan Adams is a successful entrepreneur who co-founded Ozow, one of South Africa’s biggest fintechs, before exiting to start Aions.

In this episode, Mitchan sat down with Eitan to chat about his journey from township, to experiencing his tech startup rapidly scale into a multi-million dollar company, and the big question he was faced with next – do we have a responsibility to invest back into the local tech ecosystem?

Big Fish Stories is available wherever you get your podcasts. Take a listen.

legalese.co.za

 

 

 

Eitan Stern: 

Alrighty. Um , I can’t remember if we do an intro, we just sort jump in.

Mitchan Adams: 

Is there a jingle?

Eitan Stern: 

Is there a

Both: 

Okay, Nice . Cool.

Eitan Stern: 

Welcome to Legal’s Big Fish Stories, the podcast where we showcase local South African entrepreneurs their stories and their big relevance to the world around them. As lawyers working with startups and established businesses in the tech and creative industries, we get front row seats to some incredible business adventure rides. The problem is that as lawyers, our work is confidential with big fish stories. We’re going inside the room with some proud detail , African entrepreneurs to talk about their airy highs, lonely lows, and creamy middles of the road to success as a country, deep in economic development, there is massive potential for smart entrepreneurs to build something great. Join us as we meet some of these big fish and find out how they’re looking to make their ponds even bigger. I’m your host, managing director of Legalese, Eitan Stern. Mitchan, why don’t you kick us off? Can you tell us, tell me a little bit about yourself , uh, where you from? Yeah. How did you land up sitting the last today?

Mitchan Adams: 

Okay. Right in the beginning. I’m from Joburg , originally from a township called Rietvallei. That’s where I was born, raised in a place called Fleurhof. Went to school in , uh, Bosman Coronationville. So just around all the color townships in Joburg , basically. And that’s all I knew in life Sure . Was that my father always used to tell me growing up, There’s more to life than being colored <laugh> . Okay . So I would say the pinnacle of change for me would be when he forced me to go on a Contiki Tour. Yes . Forced . Wow .

Eitan Stern: 

<laugh> . Where , where did that go? To?

Mitchan Adams: 

Uh , Europe basically. So we went to London, and then for 30 days you just do a Europe. Amazing.

Eitan Stern: 

How old were you for that?

Mitchan Adams: 

I was 17 years old.

Eitan Stern: 

Okay. If we fast forward the conversation a little bit, you were one of the co-founders of Ozow.

Mitchan Adams: 

Yeah. Yeah, yeah ,

Eitan Stern: 

Yeah . And your , your role, you were the cto, right ? The , the chief .

Mitchan Adams: 

I played many different roles . So your founder as a founder, you, you do what you must where you can in order to forward the business. So it was the three founders, myself, Thomas Pays, and Lyle Eckstein. Lyle Eckstein is my best friend. I’ve known him since I was five. Uh , we both technically inclined. He a lot more than me. He’s a lot more structural. I’ve always been this creative kind of guy. So I’ve been into music, I’ve been into art, all of that. In fact, my first company started was a , a recording studio. Okay. Wow . Was a record

Eitan Stern: 

Label. Yeah. That’s an interesting story I wanna plug into , I hope we have time today to dig a bit deep into that, but that sounds like an interesting story of itself. Yeah . I suppose my , my question is then you, you’re not the most technical guy in the company, but you are a technical guy. So how , how did you , how did that happen? How did you learn how to code and how did you land up growing up in a , in a township and leading to a career as a programmer?

Mitchan Adams: 

So, I , I would blame Lyle to solve <laugh>. He’s always been very structural and logical about things. And I’ve been all out there. And then again, my father, for me , on this whole Contiki tour, I didn’t wanna study. I didn’t wanna do anything to extend my <laugh> , I guess, contribution to society. But once I was in Europe, you know, when you leave this place, you , you place it in , in , in a certain boundary that it’s a crap place. It’s , it’s , you don’t wanna be Yeah , sure . To Africa. And then went to Europe, spent basically 30 days there and came back. And the day I landed driving from the airport back home and just looking at like, the embankments from the off ramps on highways and seeing all this green and seeing the different cultures, the colors of faces and all of that. And you’re like, this place is,

Eitan Stern: 

It’s something special here . Yeah ,

Mitchan Adams: 

Yeah . And , and that for me was like the trigger. So I said to my father, Okay, I’ll go study. And I wanted to study music. And he told me, No, you know, if you’re gonna flush the money down the toilet, <laugh> , take your own money to do that. Uh , so I should figure Lyle’s doing software developmentally me do it. Well learn from him and what he’s doing. Okay . He’ll , he’ll , you know, he’ll give it to me for free on the side. And that’s what I did. I went to technical, went to University RAU at the time. I went to Wits Tech. Funny enough, when we graduated, they merged into one and call it UJ. Uh , but you know , technicon is a lot more practical. They teach you how to go . They don’t just teach you the theory of it. So I learned through that. And once you know how to do that and you have this creative side and you combine those two , there’s nothing that stops you a hundred percent. Not even today. Like in the past, I have these people with all these great ideas. I’m like, Why don’t you do it? Cuz I don’t know how to code . Sure . Sorry for you.

Eitan Stern: 

Sometimes to get the coders , who, Well, it’s not enough just to a code. You have to conceptualize how to build something, what you wanna build. Maybe let’s, let’s dig into that. What was the, so you guys founded Ozow. What’s the, briefly, what’s the origin story for, for Ozow?

Mitchan Adams: 

Briefly. Okay . Nonexistent. Well , what’s the origin story for Ozow? So I, I’ve been in payments for years. Okay . Um , so I , I would say have the experience in, in , in payments industry. I started out at the Jse working for a brokerage and , and assisting , uh, the JSE on a project called Orion , which is to take the JSE to the next level. You know, when people were like just screaming at other people, like sell my stock and all of that, that all became digitized on systems. Yeah . And I don’t think brokers do much anymore. They just, you know, put stuff on a PC and then it does all ,

Eitan Stern: 

And AI is gonna run, run your whole buying strategy

Mitchan Adams: 

A hundred percent. And then I moved from there to , um, company that’s now called Paycorp. It was Transaction Capital. And , uh, before that was Setcom. And then they joined and they left. And it was all over the place. Through there I learned about ATMs. I coded ATM machines, I coded , uh, your payment , uh, swiping machines. Okay . I coded online payment systems. Uh , so

Eitan Stern: 

You really have been in payments since, since payments got deified,

Mitchan Adams: 

Basically where , So PayPal is essentially South African company. And we always used to say at that time, we the PayPal of Africa , even though PayPal was okay , <laugh> , the PayPal of Africa just didn’t , uh, work

Eitan Stern: 

There side . So , so you’re in payments, you’re going from payments company to payments company. Yep .

Mitchan Adams: 

And then you got Thomas, who’s in marketing, and he, he’s like a serial entrepreneur. Okay . And so he goes online with one of his sites and he becomes a client. And , uh, let’s say your best and worst client . So somebody that complains a lot to you about your service, but gives you a lot of feedback to improve your service.

Eitan Stern: 

That’s, I I I say feedback is a gift, right? Yeah . Is clients telling you exactly what’s, what’s wrong with your service, where you ,

Mitchan Adams: 

Those things. Unfortunately, the CEO didn’t see that way Okay . On that company. So he put me in front of Thomas. And so Thomas and I got a bit of a relationship going on from there and kept in touch. Lyle obviously, like I said , is my best friend. And we, we’ve been through iterations of other businesses. We tried , um, we spoke software company for small companies. Like I said, people who come to us with ideas and they’re like, We wanna do this, we wanna do this. Like, do it. I need coders. Well , okay, we coders coders , but we’re just not gonna do it for the sake of doing it. But yeah . So give us a stake in the company that worked for , but , but you moon like it , right? So you have your real time job. I’m trying to do the record label and I’m doing that <laugh> . So none of that really ever took off. When Thomas reached out to me, he wasn’t pretty successful. Uh , at least to my knowledge , uh, he’s made quite a bit of money. And he said to me, You know, you , you’re working hard and I can see what you’re doing and you’re building up somebody else’s wealth, why don’t you build up your own wealth thing , come help me build something. It wasn’t Ozow, it was something else. Okay. Which failed <laugh> . Okay . <laugh> horribly. And , uh, and so we just pivoted from them . We kept on pivoting, pivoting, pivoting, keep

Eitan Stern: 

Trying and trying and trying.

Mitchan Adams: 

Yeah. And , um, coincidentally , uh, there was a big company, big payments company that was interested in buying a software portion of what I had written back in the day , uh, at the old company. And that deal fell through for some other reason. And then they were looking for the original developers. And so somehow got hold of me and , uh, let me say , Okay, well look , we’ll see if we can put something together here. Look , there was old court case that happened around this <laugh> , uh, where they said, I stole the code. They

Eitan Stern: 

Said , Okay . So there’s a whole IP aspect of

Mitchan Adams: 

Yeah . They said everything that’s in my head. That’s, you

Eitan Stern: 

Know , standard thought , standard lawyers being lawyers, you know what you gonna do

Mitchan Adams: 

<laugh> . But I mean, we , we beat the case. It was , it was basically a personal vendetta against me, took years. Sure . So Ozow was already established for a couple of years by the time , what , what

Eitan Stern: 

Year are we talking about here? When this all

Mitchan Adams: 

Happening? Uh , so 2014. Okay . Is when Ozow actually got conceptualized, I would say. And court case kicked in probably end of that year.

Eitan Stern: 

Okay. So through all this up then, at some point in this, you guys conceptualized Ozow Yeah . And launched it. And when Ozow launched, was it with the business model that you did , when Ozow became famous for and what Ozow does today? Is that what you guys started doing? Or was there iterations of that even when you started Ozow? So

Mitchan Adams: 

It was called, I-Pay initially. Okay. Uh , I dash Pay . And that’s also the reason why we changed the name. You can’t have a dash in your name and people searching it. Cause there’s another Ipay. Yes. Okay. Uh , and they sell Air Time <laugh> . Okay . People went to the wrong company. That’s

Eitan Stern: 

Very funny. I’ve got a friend, a close friend’s in payments and we , we , we always tease him that he sells air time for another <laugh> .

Mitchan Adams: 

Essentially . That’s what he is . So initially when I was in payments, I mean, technology has changed a lot. Yeah . So when I started on in Payments, we had Internet Explorer that was your standard browser Okay . Existed and then few years later you got Chrome coming out and then slowly Chrome became the more popular browser and it was the internet Explorer six. Right. Which didn’t do much. And it was an active X plugin that you would’ve to put on the , uh, you didn’t have this great interaction that you have these days. Sure . Uh , then you got Firefox joining the , the pool. And then you got different operating systems coming in . Mac started becoming a bit more popular. So people started just Mac . And that comes with Safari. In fact, at the time was Netscape and then moved on to Safari. Uh , and then you got people moving onto Linx and like Microsoft wasn’t like the default thing anymore. So software that you put out there couldn’t just cater for this one thing. And even further than that, mobile phones basically they

Eitan Stern: 

Mobile into the picture now . Just ,

Mitchan Adams: 

Yeah . And, and then you got apps and all of that. So, so by the time we started creating something, that’s the gap we saw. Everybody was focused on that old technology and was already quite legacy. And we wanted to move it into this new era where we saw people operating mobile first, number one. Number two, if you wanna do updates to a system, traditionally you kind of like have to plan your evening. Like tonight we are going to shut down the system. You’ll even see from banks. Now banks will tell you you can’t go to the atm. Tonight’s already because we have to do, Yeah . Uh , so we, we made it modular where it was like, okay, this portion of the system needs to come down now and we’ll take that out of the system and we are planning , cuz you’ll know what people use at certain times and we’ll take that, I’ll fix it, put it in. And nobody actually knows that the system had to go down. Uh , in fact, the old system hasn’t have to go down. It’s just that one portion.

Eitan Stern: 

So , so that’s the start of Ozow then. So our 2014, 2015. So then you guys run it for a couple of years and , and what happened? You guys , you guys had a , you guys ended up selling it in the last couple of years?

Mitchan Adams: 

Yeah, So for between 2014 and 2016, we were just bootsstrapping and we got our first investment in 2016, 10 million Rand. Uh , and then, I mean, it’s a constant reason . That was Angel money. We got the second set of Angel, which is another 10 million. How much should I say ? I say 10 million. Yeah . That was say 10,000 doesn’t get you anywhere . Yeah . So 10 million and then second 10 million. And then I think we got 40. Okay. At

Eitan Stern: 

Local or international? Local.

Mitchan Adams: 

All local. Um , there was this great thing called a 12 J fund. Yes. Remember them ? Yeah. But it’s been canceled now . Yeah . Uh , so, so that was scale long ventures . They , they invested in us a few times as another corporation called Buffet Investment. Yes . Not to be confused with `warren Buffet. Uh , yeah . So they , they mainly invest in property, but they took a gamble on us as they first take investment . So, and then you have Vunani Capital as well that came in. I think they came in with a 40. So that was in 2018 when we got the 40 for those two years when we went into Covid . Right. Well, 2018 till 2022, we didn’t raise anything further . Sure . So for four years we ran on that and , uh, it was an interesting journey getting there. And there’s last raise. I just see like, it’s a weird, we , we , we speak about that hockey stick, you know? Mm-hmm . <affirmative> , like , you see the curve happening and then there’s hockey stick and you dream of it. Yes . And you speak of it and you, you put it out into the universe and you , and then it happens. So

Eitan Stern: 

I wanna know more about that. What what’s that actually like, I suppose for entrepreneurs everywhere listening. Yeah . You dream of that hockey stick when , when you’re working at something, you’re seeing slow progress and you see that that exponential progress. What , what , what did it feel like at the time? Was it difficult? What is the ops? Like, how did it feel?

Mitchan Adams: 

Yeah , it’s way more stressful than what you would think. Okay . Cause over the years leading up to that, you’re stressing all the time, but it’s like a managed stress. And then you get to this point where you can actually breathe and then your body shuts down. It’s like all that stress from all those years, but it’s the button and load it <laugh> . Okay . And , and it’s like you’re working towards something and then you get it and then you, you say, Okay, so why now what do I do? This , this has been my purpose the whole time and now that I’ve achieved my purpose, what do I do?

Eitan Stern: 

So what did you guys do?

Mitchan Adams: 

Well, I left <laugh>. Okay . <laugh> . Um,

Eitan Stern: 

Why , So when , when you left, that was when the company started to scale rapidly. It wasn’t that you, you guys left from a , it wasn’t the whole company was sold. There was a buyout for you.

Mitchan Adams: 

Well, so yeah. So 10 cent in China, which is part of Naspers, they gave us 48 million US dollars. Okay . So not that they gave it to us, we had to convince them to over. Yeah. It’s probably a two year journey to get there. And uh, it’s not just them. They lead the round. There’s other people that invested as well. And leading up to that point, I, going through Covid saw the problem of unemployment basically. And that’s, that’s what contributes to crime. People don’t have money, so they stealing. And I even go to the point where I was like, it’s okay to steal if you’re angry . It’s okay to, you know, rob the bank. If, if your kids need clothes and , and we can pardon that person, then it’s not necessarily the right way of thinking. You shouldn’t steal from people should add value. And that’s IAnd . But

Eitan Stern: 

There’s a humanizing aspect to the whole thing, looking at the person doing it instead of just action. I I get what you

Mitchan Adams: 

Said a hundred percent. Yeah. But , but it’s about value. So I got to this whole thing of what is money and, and work my way back, all the way back to where money was invented. And it was literally, there was the barter system and then people got to a point where like, look, I can’t carry a million potatoes to the market every day for your one sheep. Can i not represent it to something else. And everybody got together and like, we need something really, really rare to, to represent a thousand potatoes or million potatoes. So let’s, this is very rare sea shell . So from now on these sea shells represent that. And at that point we devalued value in my view . Yeah.

Eitan Stern: 

But why , why , why is it that this example , why is it relevant in the story of, in your story of Ozow?

Mitchan Adams: 

Because it comes down to time, effort, and energy. Okay. So instead of spending your time planting potatoes, now you are out on the beach looking for sea shelter as no value to anybody’s life. Yeah. And where I was, like I said, I was a founder and I moved through all the different , um, roles. I was the support manager. I shared a role at CTO with Lyle. At one point I was a salesperson, I was a lawyer, I was the accountant to the best of my abilities. Sure. And when you find somebody that can actually do the job, you hire them, you give them context, you support them, and then you , you give them full authority to do their job and you’re let go, that is the most important thing. And going through all those roles, I got to a point was like, am I still adding value to this company? I didn’t feel like I was. And I started looking at, at this , the situation, people without jobs, people stealing and all of that. And for what? So you can live for the next day and then live to the next day and live to the next day just living for the sake of living. What’s the point? There needs to be a purpose to something. It must be value added. And I started speaking at schools. I started just , you know, at your local braais and, and encouraging people. And I could see that that light switch on with like, it’s about value. It’s not just about me being here until the day I die or seeing how long I can stay alive. Cuz that’s the point of that. And when I saw that I could sew into other people’s lives, I saw the value in that. And specifically with entrepreneurs and businesses, that’s what I wanted to focus on then . Sure. Okay . And that’s , that’s what drove me to do Aions basically, which I’m doing now.

Eitan Stern: 

Yeah . Okay. So I wanna pause you on Aions for a minute. We definitely, I definitely want dig a bit into that. But I’ve got a few more questions about, about , uh, your journey of Ozow. So out of the rest of the founding team, were you the only one that left or did the other guys leave

Mitchan Adams: 

As well ? No, they’re still there . They’re still there. I’m actually here visiting them. Okay . <laugh> in Cape Town . So they , they just open up a new office , uh, down the road here by the Fnb.

Eitan Stern: 

So , I mean, it sounds like it’s, and the reason I’m so interested is cause it’s like, it’s really interesting to open up the hood of this thing that you see dramatized in TV shows and movies and stories and it’s , it’s amazing to hear someone who has had an exit from a company and has reached that hockey stick, actually go through it. And , and your answer isn’t what I thought you thought, I thought would be, It’s amazing to hear that very humanized answer . Yeah . And I think a lot of entrepreneurs don’t have the humidity to say, Look, I’ve, I’ve reached , uh, I’ve reached the extent of of , of where I would add value . I suppose . A friend of mine says, everyone talks about climbing the corporate ladder. No one talks about climbing down it, which , uh, <laugh> which is really, which is really the should

Mitchan Adams: 

Be the , that’s a thing . Like have you heard of the pizza principle? Yes.

Eitan Stern: 

So

Mitchan Adams: 

I love it that Do you wanna explain it ? Yeah . Basically , uh, somebody will get promoted to the point of incompetence and uh , I guess is what drives you on your purpose, right? So everybody in general wants just more money so that they can improve their lifestyle. And the only way to do that is climb up the , the ladder and, and then you move into a management position and all of that. So if you are really great engineer or mechanic and, and you’re doing a really good job and people see you doing a really good job, they then promote you to manager manage that . Yeah . And then you not to

Eitan Stern: 

Great a manager manager . Yeah , no, it’s brilliant. It makes a lot of sense. And I think it’s , uh, I mean, in my mind it’s the, it’s the , it’s the point of, of running a company is to get to the point where you don’t have to be doing all the roles. A hundred percent. But so let , let’s talk about what happened after that. So when we had a conversation, once I found it really interesting, you said, well, suddenly you had some cash in your pocket, you had options, you were looking, thinking about moving to Europe and thinking about doing some other stuff. And what you eventually decided was to, you know, look back towards South Africa. So can you, can you chat a bit about that and your decision making in that?

Mitchan Adams: 

Yeah. So I was looking at Mountain Negro at the time. Okay . So they have this thing called , uh, citizenship by investment. Sure. And literally you just, you give the government a bunch of money and you invest in a hotel or some sort, which builds up the tourism on that side , which has a community. And then they, they give you an ID and you’re citizen with Montenegro, they are a candidate for the EU. So by 2025 they’ll be part of the EU. And then I become a EU citizen, which means if anything happens in South Africa, they force it <inaudible>. My kids can go study for free there. Yeah .

Eitan Stern: 

I’m sure for , for a guy who grew up in a township in Gauteng, that is a very, very different, That’s a big , that’s a big step in life.

Mitchan Adams: 

Uh , the funny thing is, my kids don’t know this . Right . <laugh> , my kids ask me, where do I get my accent from and stuff like that. They , they completely different to how I am. And now I grew up amazing . They , they see the world very differently and I want to give them all the opportunities.

Eitan Stern: 

What’s that like for you? Just to , to segway for second . I’m saying it’s

Mitchan Adams: 

Funny , uh, it’s like watching, you know, those like Russell Peters where he teases his father’s accent and all of that and he , they moved to Canada Feels like that. Like I’m in a different country and , uh, raising these kids in , uh, in a foreign land with of opportunity. Yeah . That’s what it feels like.

Eitan Stern: 

They must feel great in some ways. It does. Yeah. And also the , I suppose the challenge you as a parent is keeping that humidity for your kids as well, so that they Oh ,

Mitchan Adams: 

Well , yeah. I I still have all my principles in me. So <laugh> . Yeah . Yeah. They , they , they are humbled a lot.

Eitan Stern: 

So moving back to it. So you , you’re looking at the Montenegro citizenship.

Mitchan Adams: 

Yeah. So I was looking at that and then at the time there was this looting going on in , in , uh,

Eitan Stern: 

Durban. Durban.

Mitchan Adams: 

And my in-laws were like speaking to me like, you know what? We can afford it. Let’s do it. Set up a base in Botswana or Mauritius and let’s just leave. And very much tempted to do it. I googled, I saw the property, I saw the price and all of that. But you know , you’re checking out areas and you’re like, what is it like there Is there a Woolies down the road <laugh> like , you know what you have here and you know what you don’t have. I was also speaking to a American ,

Eitan Stern: 

Because I think that’s such a , it’s South African fact. If anyone looks to move to a different area, it’s like where’s the closest Woolies?

Mitchan Adams: 

What’s exactly, I , I have some friends that move to Mauritius and , and that’s the one thing they complain about is shopping doesn’t exist really . There’s no real malls or nothing. Yeah . We’ve

Eitan Stern: 

Got very, very strong, We’ve got a comfortable life here in South Africa .

Mitchan Adams: 

Go . Yeah . And , and they , they have to travel four hours on a flight to actually come do some proper shopping. Sure . In Canada I have friends that moved there as well and they like sending me pictures of them going to a shop where they found like all this South African products, which they idea and they, and they talk about the food and now they miss South African food because there’s no flavor there. Yeah. And yeah , people, cultures the blandness. You speak to other people. I mean, we go to other countries to work and make money. People come here for holiday. Yeah. Why would you wanna leave a place? Yeah . People come to holiday for

Eitan Stern: 

Someone Put it to me once to say people. Cause I think, and then this is where I really want dig in a bit into this , this idea of of , of people leaving South Africa. But someone’s put it to me once that people are leaving South Africa cuz they’re scared to, they’re trying to get to a life that they’re scared to live in South Africa. Yeah .

Mitchan Adams: 

I

Eitan Stern: 

if you get what I mean. So , so they’re moving to a country where suddenly they’re , they’re not living in massive four bedroom house with pools. Yeah . Because they’re scared in , in some points in South Africa , their four bedroom house, the pool’s gonna get taken away. Yeah . Or they’re gonna lose it. So Yeah. It’s a , it’s an interesting one. I kind of sit where you are with that

Mitchan Adams: 

And that’s a great, I don’t know if it’s a quote to anything. I saw it on Facebook, I don’t know if that counts, but , uh, <laugh> , this guy said , uh,

Eitan Stern: 

I’ve seen worse places to find quotes.

Mitchan Adams: 

He said , uh, don’t, don’t build high walls, build longer tables. Yeah . So, I mean, if you look at South Africans in general, in the morning I go for runs . I’m a runner, i’m a jogger in the morning and I greet everybody. Sure . And they greet back and you can see how people greet. And if you’re sitting in traffic and just look on the side, you’ll find people on the side of the road just chatting with each other. Mm-hmm . <affirmative> , these are strangers, they just interact. Go to the UK, nobody speaks,

Eitan Stern: 

No one’s speaking. Go to

Mitchan Adams: 

New York, it’s not culture. No. It’s completely different. So yeah, you’re trading a lot , uh, you trading quality for a box that’s been sold to you as in this is civilization. This our Yeah . You know, the funny thing is we were speaking about where I live in all of that and I said, I live on the West of Joburg and, and a lot of people keep telling me it’s so far from everything. Yeah . I’m like , what is,

Eitan Stern: 

What’s everything? Yeah . <laugh> ,

Mitchan Adams: 

Everything to them is Santon, basically. Yeah . And I don’t care for Santon. Santon has shops. I have shops where I am.

Eitan Stern: 

So, So you’re looking at these countries and you’re deciding , uh, you’re deciding against it and you’re , you’re well where we were, you were saying that, that it was looking quite attractive. So was attractive , was that the changing factor that, that it just wasn’t home. It didn’t have these comforts that you

Mitchan Adams: 

Used to ? That’s some of it, but I wanted , I mean, it’s, it’s Montenegro, right? Yeah. Have you ever heard of that

Eitan Stern: 

Country before? I actually have been to that country, but , uh, very <laugh> , very randomly and a long time ago. Oh ,

Mitchan Adams: 

Oh . Funny

Eitan Stern: 

Enough. But before it was Montenegro it was still part of , uh, Serbia at the time.

Mitchan Adams: 

Yeah. Or Yugoslavia. Basically the whole area was Yugoslavia. So a friend of mine, and its someone that works at Ozow, he’s Serbian, coincidentally. And then you was telling me about the place and he said, it’s basically a village with nightlife. That’s how he described it to me. I’m like, Wow. Okay. I saw some pictures of it looks amazing. It looks

Eitan Stern: 

So you make the decision not to go. So let’s talk about Aions. What is it that you decide to do with your, your time then?

Mitchan Adams: 

Yeah. So , um, I was just nudge back quickly there. Yeah . I saw that there’s actually Serbians, Ukrainians and Montenegrians in that one country, and they were all fighting each other. Ah . And I , I , I literally just saw the same problems we have in here. Yeah . Exist in there except for the loadshedding aspect, but the , that, that’s it. And, and , and then I decided, you know what, these problems exist everywhere. Everywhere. That’s fascinating. And it can be solved through people working towards it. You wanna build a well building . It doesn’t take money. You wanna , you wanna heal and fix people with cancer . It doesn’t take money. Takes people, takes effort. And that’s why I did Aions. So I was like, okay, so we are gonna stay here and we are gonna sew into people. We’re gonna sew into businesses and we’re gonna build these businesses. So do you remember 2010 , uh, the World Cup. World Cup?

Eitan Stern: 

Very

Mitchan Adams: 

Well. The government was all about Yeah. Jobs and everything. Everybody, Well , not everybody, a lot of people converted their houses into these BMBs and

Eitan Stern: 

Yeah. It was a huge kick for the

Mitchan Adams: 

South Africa. Yeah. And then six months people had jobs for six months. It was great. And then six months later, nobody had jobs anymore. It was very temporary. Let’s call it that. And, and so, so you have a bunch of people that support again . And every year there’s, there’s a new surge of people coming into the workplace that need to sustain themselves and all that. So I was on this whole thing of we need sustainable jobs. The government’s all on create jobs. Create jobs. Cool. What’s creating a job? Giving a guy a hundred bucks to clean your garden. That’s a job. Starts, ends done. It doesn’t have a job anymore. It needs to be sustainable. How can this guy have a job every single day? How can he create an income every day ? And again, he comes back to value, adding value to somebody else’s life. And in order to do that, you need businesses to hire these people. Totally. Um , and those businesses themselves must be sustainable. So if you look at the stats, 50% of companies fail within two years and it gets even worse going through time. By year six is 98% of companies that fail. So only 2% make it number one reason why they fail, lack of funding. And then second reason is lack of mentorship. In fact, I think it’s mentorship is more important than the funding, but it’s like ingredients in a cake . You can’t have one without the other. You know, it’s just gonna try eggs, you know , <laugh> and it’s quite amazing that eggs makes a cake. But yeah, <laugh> , you , you , you need to mix the flour with the eggs. Sure . And then, and then you get the cake and you go through the process. So VCs, which venture capitalists they give funding, but no mentorship. Yeah. Incubators give all this mentorship and no funding. But it’s even further than that, 90% of incubators fail because they’re just doing a tick box exercise. Yeah . Uh , and they getting funding

Eitan Stern: 

They’re a funded business, that’s looking for funding in and of themselves.

Mitchan Adams: 

Yeah. Yeah. So I mean, there’s this various government systems where the tax money comes to them in order to build businesses. And they just, you know, thinking that that’s money eating that providing what they thinking is good for the companies, but literally just tick , tick boxing everything. I mean, there’s, there’s programs that’s a week long. What are you gonna, what are learn in a week if the stats is 50% fail within one year, what are you gonna do in one week? So it , it , it doesn’t give you anything, but it might, it might spark something and then you need a further support.

Eitan Stern: 

But , so , so , so what’s Aions?

Mitchan Adams: 

Aions is a venture builder. So we take those two Venture capitalists and incubators and we merge them. So we give mentoring with a bit of seed funding and help those guys get past two years. It’s a three year program basically. Yeah . So we build them up over one year and then two years. And then we move into the third year where we have invested relationships, I mean, introduced into VCs. So we actually feel like we’re plugging a gap for

Eitan Stern: 

VCs. Totally. Because you’re kind of vetting these , these , these startup a hundred for VCs to

Mitchan Adams: 

3 year due diligence basically. Yeah . But yeah, so VCs have a criteria of if you company’s not running for three years, if you don’t make so much revenue, we’re not gonna invest in you. And they’ve been doing that for a while . And what’s happening is they’ve dried up this, this pool that existed. So now you just have these early stage companies and then you have VCs and in the middle, the guys that, the other 50% that have made it past the two year mark that have become successful, they’re gonna be successful anyways without this VC money. Just helps them get to the goals a lot faster. So these guys are only backing winners, but there’s so few that get in there now. There’s a bunch of VCs fighting each other for this money. Uh , I have VCs reaching out to me. Do you know any companies that can apply to my cohort and all of that? I’m like , no ,

Eitan Stern: 

They’re looking for the winners. Yeah.

Mitchan Adams: 

I can build these guys for you if you want. Okay . Which I’m doing.

Eitan Stern: 

So that’s what you’re doing. You’re using the skills, the expertise, experience, the contact list in order to, to help build these companies. That’s it. And let me ask you a question. Do you feel as a , as a successful entrepreneur from the South African ecosystem, do you feel that there’s a responsibility? Do you , so you said you didn’t, part of your reason for not wanting to leave was what there was a cultural aspect, right ? South’s home. Do you feel that there’s a responsibility that founders have to stay or to invest back? Because I mean , to get real, like a lot of people are leaving and a lot of successful people have made their cash are bouncing and those people might have benefited from the section J 12 investments or, or the local ecosystem. Do you think there’s a responsibility, like for people to stay?

Mitchan Adams: 

No.

Eitan Stern: 

<laugh> ? No.

Mitchan Adams: 

Nobody owes nobody nothing. Okay . And people are selfish, to be honest. I live in a complex and all I see on this WhatsApp group is complaints. Sure. And, and they’re like, let’s replace the trustees. And then you put new trustees in there and they go for their

Eitan Stern: 

Self-interest.

Mitchan Adams: 

Yeah. Whatever they want to do. And then it offends other people. So that’s how people are by nature. It , it really, you need something that speaks to you. You need, you need roots that that’s gonna push you back there. What I find is the people that are leaving are even , they don’t feel powered enough to make a change. So they leave. And these are normally the people with, with , uh, humbled roots. And then people that are affluent are leaving because they’re just like, I don’t wanna get my hands dirty. So they leave it really, There’s a middle ground. Yeah . And that there’s not a lot of people that’s gonna do that. And that’s why those people are always special. I feel like I’m blowing my own horn here. But No,

Eitan Stern: 

That’s , it’s great . It’s great to hear

Mitchan Adams: 

It’s a special person. Yeah.

Eitan Stern: 

Because, and , and you’re right, there’s a middle ground. There’s , you’re probably not the only one that occupies it. Right. There’s a lot of people, While it’s rarer, there’s a lot of people that are happy to get their hands dirty. And it’s really great to, for those people to get a bit of a voice instead of just the people I’m leaving, I’m going to New Zealand. Um , <laugh> . So , I mean, and so if it’s not a moral responsibility, I mean, do you think there’s still, is there money to be made in South Africa from the south African ecosystem?

Mitchan Adams: 

Definitely . So this , this is the weird thing for me. Um, businesses in Europe, for instance would be so, so this infrastructure, there’s everything that exists there. There’s , there’s no need for businesses really to exist, but they create frivolous companies like bottling smells. Yeah . <laugh>. That’s , that’s , there’s a company there that just bottle smells. Yeah . They are problems. Yeah . Cool. So we run away from our problems. No, you find solution to it and then you monetize it. That’s business in Africa. And because there’s so much problems, there are some many business opportunities. Totally. And that’s what excites me about the ecospace . Yeah .

Eitan Stern: 

So mix that with the ingredients of a little bit of funding, a little bit of mentorship. And

Mitchan Adams: 

You’ve got in and , and then there’s further than the monetary reward . I mean, you , you’re changing people’s lives. Sadly , uh, in , in these three investments that we’ve done so far, like as Karen will put , it’s my business partner, she’ll, she’ll put it that we are gonna make an Emmy or win an Emmy for, for one of the stories. I mean the backs stories of these people, where they come from. And if we didn’t intervene Yeah. I don’t even know where they would be. And then , uh, yeah, you get messages of, you know, Thank you, thank you for, for what you’ve done and for believing in us.

Eitan Stern: 

That seems a lot more fulfilling in our life than a train arriving on

Mitchan Adams: 

Time . A hundred percent <laugh> what trains don’t exist.

Eitan Stern: 

Um , and local talent. Are you spotting with , when you’re looking at local entrepreneurs? Are you spotting talent? Are you spotting that there’s, that there’s hardworking, good entrepreneurs that are here looking to build companies?

Mitchan Adams: 

Um, hardworking is a difficult Okay. Uh , thing to measure cuz it’s very subjective. Sure. Uh , some people think hardworking is just like putting hours in that you at the office. Yeah . You can be productive two hours. Um, I find there’s a lot of people that are willing, a lot of people the right , uh, attitude, but I think social media has conditioned them to chase the wrong words . Basically. The Peter principle. Sure . They just wanna climb up a corporate ladder somehow and they want to reward system. But you find that founders learn the lessons very quickly. Favorite quote, Mike Tyson, everybody has a plan until he get smacked in the face. And that’s entrepreneurship from day one. Totally. And so founders find it very quickly that, you know, actually I need to be self-disciplined. I need to become organized and I need help. Yeah. So they’re open to help. They hire their first people. This is where the problem comes in <laugh> . These, these guys that come in are expecting kind of corporate package and corporate life and not understanding that if they don’t deliver every minute of the day that they are employed, it affects the business in a way that there won’t be a salary next month. Gotcha . Yeah. And you don’t wanna scare the employee into that. Cause now they’re all like, Oh, job security. Actually maybe I should go work for a bank where I can, you know , spend two hours in the toilet playing on my phone versus doing work at the office.

Eitan Stern: 

Do you know people work in banks that do

Mitchan Adams: 

That? Yes. <laugh> a hundred percent . Okay . People do that. I think that’s also why they like it among working Sure . These days, employees , uh, it does give freedom. And I think initially it was great. Exactly . Time saver with traffic and all of that. But now it’s, it needs self-discipline and most people don’t . Their self-discipline, they don

Eitan Stern: 

Self-discipline. Yeah . As we start to wrap up, any, I’m curious for , for founders and hopefully there’s gonna be founders and people looking to start businesses and people that have looked up to companies like Ozow listening to this , uh, what’s your Mitchan Adams? Uh , words of advice for someone looking to run, start a business in the South African tech ecosystem.

Mitchan Adams: 

Solve a problem. <laugh> . Okay . Uh , essentially , um, even that’s ,

Eitan Stern: 

That’s a social problem. That’s not like, I don’t know what time the movies are playing. That’s a , for even the social

Mitchan Adams: 

Problem, if you can solve that. I mean, even for listen , things like that. Something that makes somebody’s life easier. One of my favorite TED talks. So five minute thing about how to tie your shoe laces. Okay . Properly. Yeah . <laugh> turns out I didn’t know at the time my shoe laces properly. When your laces is facing , uh, vertically, basically down your shoe, you’ve tied it wrong. When it’s horizontal, you’ve tied it the right way. And from that, I actually realized how many times I was bending over the time my shoe laces because they were loose all the time. And I probably saved the hour of my day by tying it the right way. Solving something small and frivolous like that can add value to somebody’s life and they’ll be willing to pay one Rand, five Rand a month for that.

Eitan Stern: 

You don’t know where that value is gonna come from. A

Mitchan Adams: 

Hundred percent . So just find the problem and solve it for the consumer. Don’t be like incumbents. Incumbents are like, let’s create a product and see how much money we gonna make out of it and then sell it. It adds no value to anybody. It , so the marketing around it makes it look like it’s great value to the consumer. The consumer’s like, Okay, I need this. And then they use it and then they’re not 100% satisfied. But it , because it was never ever meant for the consumer. It was meant for the business to make money. So money needs to be made in some way. And look at Jack Ma for instance. He said he never ever had a business plan. His business plan were people sending him emails, thanking him for the platform that he created. And so he , as a result of that, he didn’t have to pay for food at any , uh, restaurant. You would go there, people will give free food, you will get sent , uh, you know , clothes, all of that Yeah. For a while . And then money came afterwards. It will come . If you’re solving a problem, people will pay for it.

Eitan Stern: 

Totally.

Mitchan Adams: 

If once they become reliant on it. So you do the freemium, basically freemium to premium, you give it away for free. People become reliant on it to take it away. They’re like, where’s this thing? I need it. I’ll pay for it. Cool. Then you go premium.

Eitan Stern: 

It’s such a good reminder. It’s something I think about a lot, but it’s great to, to have heard you put words to it, which is focus on value. If you’re not creating value, you’re not really creating much. Um , which I love. If people want to get hold of you, how do they do it?

Mitchan Adams: 

Um, I guess Instagram <laugh> . Okay . Yeah . They can message me on Instagram. Um , they can go to our website it’s aions.co.za. What does it mean? It’s a finish verb. That means I intend to start something. The reason why we went with finish Finland, supposedly the the happiest country in the world. Yeah. But South Africa’s the best place in the world, so merge those two together. And , uh, you probably have utopia.

Eitan Stern: 

Maybe just to to , to wrap it back to where we started , uh, the , the township that you got that you grew up in. Yeah. Do you have any connection to still tour you visit , you still have family there? I

Mitchan Adams: 

Was actually there yesterday, so my grandmother’s house is still there, but she’s passed on. My aunt still loves there , so she’s about to sell the house. So that’s the final connection I have.

Eitan Stern: 

Yeah. What’s it like going back

Mitchan Adams: 

Feels very normal . Like yesterday, <laugh> feels like yesterday. See a bit of gentrification happening in certain areas.

Eitan Stern: 

Great and

Mitchan Adams: 

Great and bad. Yeah . But honestly, I don’t want to expose my kids to that environment. Okay . And , uh, like El Dorado Park , I live there for bit and my kids have never been there. Mm . I don’t wanna take them there. I do want to expose them to lessons and things I got from it , but I don’t wanna expose them to the environment at all. There’s people I’ve met in my life, I never been there, and they neither better off or worse for not being there. So what do you get to gain from it ? And that’s also, again, what motivates me is like, why? Yeah. So let me go there and actually add value again, it always comes back to value. Let’s add value, let’s sew into it. So there is a need for people to say, Yes, I need to go there so that I can add something different to my life.

Eitan Stern: 

So you can see , see the issues, I suppose if you shelter yourself too much, like, like what we saying about people in Europe, but it exists from here in Africa. If you shelter yourself too much instead too much on your privilege , you’re not gonna see the issues that need solving. So you’re gonna be building something to find out what time the movie starts instead of solving issues . Mitchan. Thank you. I I gotta say you haven’t answered one question in the way that I thought you would today, which is so, so refreshing and it’s just, it’s really great to sit with a true South African entrepreneur. Thank you. And , uh, and, and chat. Thanks for joining us.

Mitchan Adams: 

Awesome. Thank you so much.

Eitan Stern: 

This podcast is recorded by Simon Atwell . The intro music is by PHFAT. I’m your host Eitan Stern. For more information about legalese , catch us on legalese.co.za or on the socials.