Marilyn M. Kamuru On The Hot Seat

December 3, 2018

It is 11am. The open-air sitting space at Java Galleria is just filling up. In one of the corners, a gentleman is busy on his MacBook Pro, probably following up on several invoices. In another corner, I am doing a final prep for my interview with Marilyn Muthoni Kamuru, founder and former Managing Director of eManage Africa Limited, a records and information management company.  Seems she is a regular at Java Galleria, because after she arrives and after a quick exchange of greetings and pleasantries, the kind waitress who attends to us, acknowledges with an affirmative nod of the head when Marilyn orders, “the usual”. It is the hot water with lemon and honey. I settle for the house coffee.

What three words describe Marilyn Muthoni Kamuru?

Focused, passionate and impatient.

Impatient? About what exactly?

Everything (laughs). But really, I am impatient about positive social, economic and political changes that mean better, fuller and bigger lives for all of us.

So you would like to see these changes happen sooner rather than later…?

Exactly.

What is your drive and motivation?

It depends on what I am doing, and I do lots of different things. But I would say my motivation is to create and exist in a better space for myself and for other people.

You recently sold your business. What led to this decision?

I did. I founded it in 2005, registered it in 2006 and then sold it in July of this year (2018). I started my business knowing that I was going to sell it eventually. It was not odd for me. The plan was not to be a long-term entrepreneur. I knew that before going in.

Are you setting up something new?

I am currently in transition. Dr. Seuss has a book called, “Oh, The Places You’ll Go” where he talks about what he calls “The waiting place”. It is not a good place to be but that is where I am now. I am thinking about what to do next.

I am however writing a book. It is about how the last decade has been. Thereafter, I will figure out what to do next.

And what do you plan to call this book?

I have some potential titles in mind, but I am not willing to share those right now. Not just yet. Classified stuff. (laughs)

Did you have a board while running your business?

No, I did not.

When I moved back to Kenya to start my business, I did not have an established professional network. I could not find a group of people who I felt would understand me and my vision enough to get a board. As the founder, I had a very clear and focused idea of what my business would be, but I was in a space where I was setting up a whole industry because the industry initially did not exist. I would have needed a board that would have been willing to learn about the industry I was getting into and about my clients. I felt that would be difficult to find. It was already difficult for people to believe I would stay long enough to launch the business. Being a diaspora returnee, I was met with a lot of cynicism.

Additionally, I was self-funding the business and there was some reluctance to let people into the kind of risk that I was taking. I had bet all I had in the business and I did not want to expose that in the early stages of my venture.

I also had a bit of hubris about my own capability (laughs). It is part of what it means to be an entrepreneur and you need that while starting out.

I did not set up a board, but I created systems around me where I got the same feedback I would get from a board. I knew a lot of small and medium enterprise owners and I surrounded myself with credible accountability partners and good professionals who kept me in check.

I would however tell anyone who is starting out that it is important to have a board, but do not kick and stress yourself because you do not have one, especially in the early stages.

What do you think is the appropriate time to consider setting up one (a board) after one is passed the launch phase?

When you want to bring in partners to invest in your business, you must set up a board. When you start scaling, you must set up a board because it is critical to manage yourself, the company goals and to also help to manage the process of growth.

When you start feeling scared, waking up at odd hours of the night thinking about the business, it is time to get a board. (Laughs)

How was your experience as an SME and what advice would you give entrepreneurs?

An entrepreneur needs to have clarity on what kind of business they are going to run. Are you setting up a business that you will eventually pass onto your children or are you setting up one to eventually sell after a while? Or do you just want to make money and will do anything? Who are your clients? What are your own skills? There is an enormous amount of self-knowledge that you need before you start and as you grow your business. That is why it is very difficult sometimes to set up a board very early because you are uncertain of so many things or even if you think you know them, you encounter pitfalls that leave you questioning your trajectory and making some adjustments.

There is the theoretical aspect of running a business and then there is the reality. In Kenya, there are practically zero consequences of failure to pay for goods and services on time especially by the government and larger corporations. In many ways, you find that SMEs are financing larger businesses. SMEs have this additional penalty of being SMEs because they are essentially financiers of larger corporations yet subject to the same bureaucracy and tax regime as larger companies. There is a significant hidden cost to being an SME in Kenya. The leverage for SMEs is also extremely small because they do not have the clout when it comes to policy formulation. Our business associations tend not to be democratic and are dominated by larger companies and multinationals whose interests are divergent from those of SMEs.

So the current ecosystem does not support SME growth?

Not at all.  It does not treat SMEs as a growth engine for this country’s economy. The government being the biggest buyer in the market delays with its payment to SME’s but still requires them to pay taxes on time and imposes penalties when they don’t. These entities cannot even offset these delayed payments against taxes because the government does not allow room for that discussion. Technical experts tend to be employers and not legitimate business owners and the engagement with SMEs is limited. Further the government’s inability to execute on its own policies even those that will benefit SMEs e.g. the 30% Public Procurement Program mean that this is an environment that favors big business, multinationals and briefcase but highly connected companies.

So what needs to change?

We need policies that are geared towards these small and medium enterprises. I do not think SMEs have a space to engage in terms of policy. Beyond policy, there are certain practical things the government can do. It should pay people on time, and if it cannot pay people on time, it should have a means where one can offset these delayed payments against taxes. We should be able to have the same penalties that the government imposes on us when we fail to pay our taxes on time. Changing the environment means that the companies we celebrate are not the large corporations in the market, but the small organizations creating jobs and opportunities for Kenyans.

SMEs need a much friendlier tax environment, significantly less bureaucracy and greater certainty around costs. Electricity charges have been unpredictable and that adds onto the operational costs for these SMEs. Poor infrastructure means resources that could go into our businesses are spent on repairing vehicles and subsidizing transport for employees.

The constant focus on what is wrong with SMEs is what is removing the focus from a policy environment that is toxic for them. Our policies are driven in a manner that responds to corporates and lately more so to foreign corporations. SMEs do not have the public policy space to table their issues and have those resolved. Also, the government needs to demonstrate greater fidelity to its own policies.

Did you have any setbacks and low points in your entrepreneurship journey? And how did you pull through?

Wow! Many low points. It took me over a year to get my first client. I invested all the money I had in my business, but I had not bargained on a whole year with no clients. That was difficult because you can imagine I had just quit my job in the US and moved to Kenya to start my company.

Having good friends who know you and can tell when you are struggling with self-doubt is important.  Friends who can help you draw the line between what you can or cannot control and who tell you when you need to step off the gas: because sometimes you are so committed to making it work that you are blind to certain things that are holding you back. At times, no amount of increasing what it is that you are doing changes anything. I had good friends who were honest with me enough to help me understand myself and the context I was working in a lot better.

Entrepreneurship is isolating and having good friends including other business owners that provide a critical support structure that helps you keep some perspective is important. A support structure that is invested in you, the individual and not the business. A board is invested in the viability of the business and sometimes, as an entrepreneur, the business is what is killing you. The advice I would give you as a friend in your support structure is not the same piece of advice I would give you if I was sitting on your board.

Looking back, and after selling your business, what are your proud of?

(Interlocks the fingers, rests the chin on the hands and reflects)

I provided great opportunities for employees who passed through our doors. I also had a chance to have a positive impact on people’s lives especially my employees to whom we provided health insurance and a respectful work environment. I am not sure every one of them would say they liked working for me (chuckles) but I grew people and I helped them with opportunities to grow and expand. I am proud of that.

And what has this entrepreneurial adventure helped you learn about yourself?

I am great at ideation and bringing ideas to life. I get bored with businesses that are just about selling and managing money.

If I was to do this again, I would be a founder and then I would step back and have somebody else run the business because I think that is where my skillset lies.

Lastly, what do you think are some of the emerging corporate trends that need immediate focus?

The focus on corporate governance is very distinct but, in my view, it is on a “tick the box” basis which is a very wrong focus. The emphasis is on what you need to do but it does not seem to be infused into businesses. Corporate governance is about accountability, but it should not be at the board level alone and at a minimum it must start with legal compliance. This is lacking. I think at each level of the organization and the business environment, we should be ensuring accountability.

I see a growing gap between policy and practice and a failure by the corporate sector to call the government on this gap or to bridge it themselves. For instance, with little more than a decade to Vision 2030, one would expect more focus on realization of the vision and less deviation through articulation of new but unnecessary and misaligned policy agendas. Local and international investors made investments based on Vision 2030, it hurts our economy when policy commitments adopt the same cycle as elections. We need to stay the course.

I also see a dangerous retreat from the rule of law which bodes poorly for the private sector. The failure by the government to comply with basic constitutional provisions in the compliance of court orders as well as in the composition of bodies from parliament and cabinet to state corporate boards, for instance with regards to the Two-Thirds Gender Principle, and the silence (maybe even complicity) of the private sector are indications that the Constitution and the law are not mandatory but optional. That is dangerous for any investor because all private property is secured by law. When professional associations and the private sector are silent about violations of the constitution, they abdicate their responsibility as citizens and create an environment that injects greater risks to businesses. The effect of this is increased risk of doing business, which inevitably means increased costs of doing business as well as decreased certainty about the legal and regulatory environment: all poor indicators for businesses especially MSMEs and consequently for the economy.

 

I left Marilyn working on the draft of her book as I had to dash back to the office to transcribe this insightful piece. Quite evidently, she exudes the passion for a better space for SMEs. These small and medium enterprises are the grease that oil the gears that drive economic growth. They create employment for the population that grows by the day and to prevent them from deformalizing, they require a friendlier policy environment. Beyond that, entrepreneurs running these enterprises need to understand that having a support structure that extends beyond the board room is vital to ensuring growth at an individual and business level.

 

The Inquisitor.

 

 

 

 

 

 

 

 

 

 

 

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