A Blue Ocean Opportunity

The Moja Thesis

In 2022, a venture capitalist asked me to put the Moja thesis in writing. I took the request earnestly and, on a quiet Sunday afternoon, penned the essay below.

I doubt the VC in question ever read my lengthy screed and if he did he was clearly unpersuaded. Still, the exercise was a useful one for me.

I was CEO of Moja, it was my job to tell our story and this was an opportunity to describe in detailed prose the immense opportunity that we had discovered— an opportunity hidden to the majority of American and European investors, that still is.

Shortly afterwards we got into Techstars, closed our round, built out our tech team and launched into the Kenyan market, only to shudder to a halt, for reasons that I will spare the reader.

We have since made some big changes to the team, have re-oriented our tech-stack away from traditional finance to blockchain and are in the process of building a version of Moja that will be a faster, smarter, better.

The thesis outlined in 2022 however, still stands; not in every detail —some of the specific features of Moja 3.0 will differ, as will our launch strategy— but in its fundamental insight. Indeed trends in technology, demography and economy make its argument even more compelling.

So here you go, the Moja thesis. Perhaps this time a VC will read it :). If they don’t thats ok — I write for posterity, for the day that Moja is a breakout product and I can say “I told you so.”.

1. The Moja Value Proposition

Moja customers will be able to save, send and earn with family and friends, — wherever they are in the world.

At first blush this value proposition may appear innocuous.

Lift the hood however and there is a radical idea, an innovation built upon the confluence of technology, tradition and newly emergent behaviors.

2. Group Saving

Moja builds on the practice of group saving, an evolving and for the most part neglected financial behavior that is deeply embedded in African society as a source of solidarity and aspiration

Known as a Chama in Kenya, a Susu in Nigeria, and Ekub in Ethiopia there is a name for savings groups in every country in Africa, indeed around the world. Together they represent a complex ecosystem of financial instruments that includes credit unions, professional savings associations, table banking, Rosca’s, crowd fundraising and women’s saving groups, as well as widespread habits of informal financial[1]collaboration between family and friends.

With most of the VC money going to payments and traditional remittances it is a largely ignored market. Where there is interest, the focus of investors, entrepreneurs and development agencies tends to be on country/region specific, complex, structured, group saving instruments and institutions; for example, professional savings associations (Kwara/ ASUSU), rotating saving and credit associations (Dreamsave) or sophisticated group savings (Chamasoft). With few exceptions products built for this purpose are complex and unintuitive, designed to replicate the full analogue experience in digital form.

3. A Blue Ocean Opportunity

This approach to serving a vast blue ocean market opportunity suffers from being both backward looking and too heavily focussed on what is effectively a b2b market with high barriers to entry and limited opportunities for scale.

A. Social + Fintech: A New Type of Saving Group

Backward looking because savings groups are rapidly evolving; shaped by technology and the habits and expectations of a younger generation. Difficult to enter because traditional savings groups have established systems in place that their members are attached to and often benefit from. Hard to scale because despite an underlying set of principles established savings groups are highly varied and culturally and economically specific and deeply conservative.

The real opportunity lies in the digital generation. A generation raised on social media and mobile money; who have grown up watching their parents and grandparents running savings groups, are interested in their benefits but overwhelmed by their analogue complexity and are in search of tools that track with their experiences with a digital world.

Time poor, economically aspirational and at once both more connected and more dispersed; their habits are in some ways closer to their Western counterparts than they are to their grandparents — more Social + Fintech than Village Savings and Loans Group.

But whereas Europeans and Americans are rediscovering Social + Fintech, in Africa it never went away. Africans have grown up with the idea of collaborative finance woven into their consciousness, through the example of their parents and their own lived experience.

Whether its young boda boda drivers with “I am on the road to succeed” emblazoned on their motorbikes, the high school buddies who have started saving together to invest in land, or the media executives who have a saving group at the office for the annual team holiday, the habit of horizontal financial collaboration is alive and well.

B. Saving Across Distance

One of the defining features of the new generation of savings groups is that they happen over distance. Often unable to meet physically, either because they are geographically dispersed, time poor, or both, they face exacerbated challenges of cost, coordination, trust and transparency.

Increasingly peoples’ trust networks of family, friends and colleagues are dispersed between village and city, country and country and continent and continent. Where they live together in the same area, the pressures of work and travel make regular meetings that characterize traditional savings groups more difficult than ever before.

But whereas once upon a time this would have put an end to practical collaboration, perhaps even the sense of community, modern technology makes it possible to keep these relationships alive, indeed thrive. WhatsApp, email, and a myriad of online tools make collaboration over distance increasingly easy and mobile money means that value can be sent to people with relative ease, regardless of location.

With this has come a revolution in our imagined communities and with growing prosperity, mobility, and connectedness a transformation in the nature and purpose of financial collaboration, increasingly this is happening internationally, quietly, and radically changing the international flow of value.

C. Remittances 2.0: The Quiet Revolution

In the 1960s, young, aspiring Africans, part of a small elite, traveled to the West on scholarships and with family support to gain new skills and qualifications that would help build their countries in the post-colonial era.

In those days there was an almost biblical quality to migration, a young man (invariably they were young men) would travel to distant lands and bar the occasional telegram would be gone for as long as a decade, returning with qualifications, modern habits and perhaps a foreign wife. Remittances in those days often flowed out of Africa.

The 1980s saw the collapse of Africa’s post-colonial promise in an orgy of loans and debts and mismanaged economies and with this came the first modern wave of mass migration from the African continent to more prosperous countries around the world.

It was here that the remittance revolution really began for Africa, as young men and women made their way to America, Europe, the Gulf and Australia in unprecedented numbers, sending money back to support extended family and friends.

The model was simple: identify a trusted member of your family or friendship network, establish a reasonable method of transferring money and send money on a regular basis, trusting that said contact will spend the money as agreed.

The business of remittances has been a lucrative one ever since, with the race to make the transfer of money simpler, easier, and cheaper ever fiercer.

There is still enormous value to be captured from this business, increasingly by tapping into new markets, with companies like Chipper Cash for example exploiting the fact that pan African remittance corridors are under served.

In the 2020s remittances are changing again. It is a little told story, visible only to those who are part of the extended African community or who take the time to pay attention.

Instead of simply sending money home and accepting that it will be spent on priorities to which one only has a vague sense of connection, more and more people are now playing an active part in the community “back home.”

It is a change made desirable and indeed possible by cheaper travel, free communications and social media. Whereas in the 80s contact between African diaspora and family and friends back home was an occasional phone call, today people often talk daily, sharing memes, videos, news, family updates, social plans, their hopes, and their dreams.

More and more people don’t want to just send money to the community back home, but want to be part of that community, buying land, building homes, investing in businesses, getting involved in charity and supporting family and friends through funerals, weddings, baby showers and birthdays, not just by sending money into a black hole but by being part of the story and having a say over how money is spent. Increasingly people are running international savings groups in everything but name.

4. Hacking Solutions: The Current State

There are no products that serve this new group saving market at scale. (At least not at the scale that is possible, MoneyFellows has a good track record serving the Egyptian market) For the most part people hack together solutions using a mixture of technologies, WhatsApp for communication, a mobile money account in one person’s name to store money, a google excel spreadsheet for records, a drop box account to store screenshots of receipts/or transactions, a remittance service for international transfers, a notebook for records.

The result is a deeply unsatisfying experience fraught with friction and failure points, discouraging many from even trying and causing a lot of pain for those who do.

5. Moja: Defining and Capturing a New Market

By building a product that enables family and friends to save together — simply, securely, and transparently — wherever they are in the world, Moja is helping to define and capture this new market.

Our focus on the younger generation of families and friends as opposed to professional savings groups, captures a huge and underserved section of the market and Moja’s simple, beautiful intuitive UX/UI creates a low threshold for engagement, making it quick and easy for users to start a basic savings group that is transparent and secure and for Moja to evolve its value proposition with its customers.

Rather than seeking to replace an analogue experience, Moja seeks to compliment it. Solving for the pain points of cost, coordination, trust and transparency and in doing so allowing savings group members to focus more fully on the social benefits of solidarity and aspiration.

A shared ledger ensures group transparency and simple governing rules provide members with a say over who joins, who withdraws and how money is spent.

International transfers make it possible for our customers to participate in their savings group even if they live abroad and in our in-app messaging function allows customers to discuss, plan and agree how they want to run their savings groups, enabling them to create records and form simple agreements.

A group payments feature will allow saving group members to authorize an individual to make a payment directly from the shared wallet, enabling members to track how and where money is spent (for example health insurance for an elderly relative).

Our savings products provide customers with access to interest bearing accounts, mutual funds and a stable coin offering that enables low cost transfers and acts as a hedge against currency volatility and inflation.

Our loans feature enables customers to loan money within groups and between groups, with our bespoke credit score helping to build trust amongst users. Our AI powered algorithms will help customers to optimize their saving groups habits.

A Moja coin rewards certain actions in our app with our token, encouraging greater engagement by participants. These actions and related token count will be our version of a credit score, secure and trusted by authorities.

The collaborative nature of Moja provides us with immense network effects and its messaging function makes it a particularly sticky product, as customers create and store trail of high value conversations and agreements.

6. The Opportunity to be Part of the Next Wave of Financial Technologies

Traditional financial services assume a vertical financial relationship between individual customer and institution. But people’s reality, in particular in Africa, is one of horizontal financial collaboration between family and friends — borrowing, loaning, and investing together. A combination of smartphone technology, mobile money, digital technologies and increasingly web3.0 allows us to wrap technology around people, to build products that track the way people use money as opposed to the way institutions want them to.

Moja is developing a tool that does just this, a means of financial collaboration between family and friends regardless of where they are in the world. A platform that compliments and enhances existing social behaviours, strengthening families, building communities and empowering individuals.

With most of the VC money going toward payments and remittance 1.0 services investing in Moja is an opportunity to be part of the next wave of financial technologies.

A Blue Ocean Opportunity Podcast Version

[1] Informal organic savings groups

A. Occur around existing trust networks of family and friends

B. Do not involve government registration

C. Are governed by largely unwritten rules that are characterized by fairness, reciprocity, transparency & accountability.

D. Are flexible enough to take account of individual circumstances/needs

E. Serve important social/emotional as well as economic functions

F. Are often the basis of more formal pooling