Target 2024: Sustainability via Corporate Governance (Part 2)--meet Dumebi Okwechime and izifin

Last time , we discussed how corporate governance can be our personal pathway to exceptional leadership, focusing on building an ethical foundation, generating trust, and driving sustainability within our companies and organizations. However, while theory is one nice, practicality is better…and that’s where izifin comes in.

I sat down with Dumebi Okwechime, PhD , the founder of izifin to better understand how one Africa-based startup put all this corporate governance talk into practice.

So now let’s tune in to the conversation…

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Dumebi, please introduce yourself for the audience.

My name is Dr. Dumebi Okwechime, and I’m the Founder of IziFin, an A.I. Embedded Intelligence technology start-up.

I was the Chief Data Officer at Kobo360, a Y-Combinator alumni, where I oversaw the design and implementation of all A.I.-related systems of the Kobo360 e-logistics platform.

Before Kobo360, I was the Chief Decision Scientist at Renmoney Micro-Finance Bank, responsible for driving the company’s data-driven operations, leveraging data as a tool for building strategy, as well as optimizing customer engagement and experience.

I started my career as a Ph.D. researcher in Machine Vision at the University of Surrey, UK, where I published four peer-reviewed Conference papers, and one IEEE Journal.

I then moved to industry where I worked for several years as a consultant, developing data science products for large companies, across Europe, Asia, and United States.

I also hold an Executive MBA from Imperial College Business School, London, winning both the “MBA Innovation, Entrepreneurship & Design Project” prize, and the “MBA Finance” prize, given to the MBA student with the best overall performance in the Finance specialization.

I have quality experience in digitization and automation, a highly diverse background, and am very passionate about the intersection of technology with business, and their potential to improve people’s lives.

But, Dumebi, you were already working in the UK for top companies in the financial services industry. What made you decide to return to Nigeria?

I developed and still maintain a strong belief that tech innovation has the potential to flourish in emerging markets, providing the ability to leap over infrastructure challenges that often hinder these countries from technological progress. So, I’ve always been interested in working in Nigeria and pushing the bounders of A.I. applications. I got a job opportunity to join a Fintech company, Renmoney, in Nigeria. They needed someone to help accelerate the growth of their micro business lending product, leveraging data and A.I. to lend to micro small businesses who are often financially excluded. When I got the job offer, it was a very easy decision to make. When I started the role, about 3 months in, my team and I developed our first micro business loan A.I. enabled decisioning flow. Watching our A.I. model filter through loan prospects that are often financially excluded was a great pleasure and its own reward.

Tell us about your experience building Renmoney and Kobo360. How did these experiences inform your decision to venture out on your own?

There were some similarities and differences working in both organizations. In both, I was the first senior data hire, so had the responsibility of growing the team from the ground up, filling up roles such as Data Science, Business Intelligence, DevOps, Data Engineers, etc. In both, I was also responsible for data-strategy, enabling data led decisioning making across the organization from sales, to marketing, and even finance. Leadership and Management were very receptive in both companies, always supporting data initiatives, which makes things considerably easier. When done properly, data can be a powerful tool in all businesses.

As Renmoney is a bank, and Kobo360 is e-logistics, how data was applied in both companies were different. In Renmoney, the key focus was on Decision Science, using data to make decisions across the bank from credit-risk scoring, to collections, to liquidity management, to name a few.

In Kobo360, the focus was to automate and streamline certain layers of operations. This included automating the matching process between supply and demand, deriving ideal routes based on risk factors, A.I. enabled overdraft limits for certain big clients, etc.

After a few years, I felt a strong pull into starting my own company, enabling all businesses with Embedded Intelligence. Most companies in this market do not have the resources to develop their own A.I. capabilities, so, Izifin was designed to enable all businesses of all sizes to gain access to A.I. to help scale and grow without the prohibitive costs. We acquired our first eight customers in just a few months and have built over 10 products to serve emerging markets with intelligent technologies.

So what does IziFin do anyway, and how are you looking to impact how business is done here in Africa?

Izifin was born out of the desire to offer flexible and affordable Embedded Intelligence products to all types of companies, despite their size or sector, eliminating the complexity, prohibitive costs, and the extensive timelines otherwise required.

Our product range is extensive, covering areas including:

·?????? KYC for digital onboarding, including face-matching, ID verification, address verification

·?????? Decision Engine for risk assessment cutting across all areas of finance including micro-loans, business-loans, Insurance risk-based pricing, Buy Now Pay Later (BNPL), invoice discounting, collateralized loans, etc

·?????? Affordability Assessment for salary estimation and credit carry capacity

·?????? Collections Scoring to support late payment collection strategies and improve collection efficiency

·?????? Fraud Anomaly Detection to detect anomalies and potential fraud in financial transactions

·?????? Leads Prioritization for improving leads conversion rates

·?????? Generative A.I. ChatBot to automate online sales processes and customer service management

What does it mean from your perspective as an African startup founder to be “investor ready”?

In my view, it means you have a compelling business with a good market size, solving a niche or important problem, and being able to demonstrate this with consistent revenue growth of paying customers, and a sound projection of how the investment acquired will enable exponential growth.

It can be very difficult to show consistent revenue growth in the beginning of a start-up as you’re still experimenting and trying to find product market fit. There are some growth accounting metrics that startups can explore that are not entirely revenue driven, but can still show performances are heading in the right direction, such as customer retention ratios, LTV (life-time value), churn analytics, etc. I would recommend being transparent. If the first 12 months of the business is slow, be clear about why, what was learned, and how this period helped shape where the business is growing towards. At this stage of growth, Accelerators and Angel Investors can still be very interested in investing and supporting your business, assuming they are the right investors. Transparency also builds a lot of trust and can help solidify relationship with early investors who may well strongly support subsequent investment rounds.

Given the current investment climate, what is IziFin doing differently to get investor ready?

We built an integrated system with several A.I. enabled micro-services which we call IZI-OS. This has allowed us to build, test, and iterate through different solutions quickly to improve our traction and product market fit.

We are also getting support from Accelerators such as Google Africa AI, and our board of advisors, to support our development, strategy, and plans to achieve a strong performance in 2024.

We have filled certain key roles including sales and marketing, to strengthen our customer pipeline and revenue performances, as well as remained frugal on expenses, keeping headcount to a strict minimum, using contractors for short interval projects, and leveraging AWS and Google’s free cloud credit for our development.

Board of advisors can also be very helpful when start-ups are trying to minimize costs. They can help fill key roles that don’t necessarily require a full-time resource like legal, and finance. They can become brand ambassadors helping start-ups push sales to their strong network, significantly reducing cost of customer acquisition. They can also be useful is advising on areas of potential pitfalls that could be avoided to better manage resources and reduce delays, mistakes, and unnecessary costs.

IziFin has been around since 2021—what advice would you give new startups to ensure they get it right from the beginning?

Firstly, I’d say get a mentor or an advisor in the industry or sector you’re in and try to put them on your board. Very important for ideation and strategic thinking. Schedule at least a monthly meeting with each of them separately, to provide them consistent visibility so they know where they can provide support. You should also have a quarterly board meeting with all board members, using those sessions as a checkpoint for progress and to make plans and preparations for further improvements in subsequent quarters.

I would also recommend getting into an Accelerator program as they are a great support for early-stage start-ups providing mentorship, free resources like cloud credit and software license, as well as access to angel and VC investors.

On the business side, I’d strongly recommend focusing on revenue, which sometimes doesn’t require a single line of code. As you’re iterating and testing, the quickest route usually involves simple designs which can be built using codeless product builders, or basic software. Sizeable interest, traction, and feedback are a better trigger to then invest in substantial development work, maximizing resource management, time, and effort.?

Now Dumebi, let’s get real--from your perspective, how important is corporate governance and ethical leadership for a business just starting out? Don’t startup founders have more important things to worry about?

Governance and ethical leadership are very important, especially at the early stages of a tech start-up. The corporate governance ensures that the founders, as well as the board, have a sound decision making mechanism, minimizing the risk of disagreement, misalignment, and the circulation of misinformation, which can easily occur in a fast-paced early start-up, with big and difficult decisions being made daily. If done properly, this can also become the foundation of a startup’s culture, where team members benefit from a clear structure of visibility, accountability, guidance, and support, essential to the team’s growth and sustainability.

Ethical leadership mirrors the above, although I’d draw particular focus on managing teams and investors. Running an early-stage startup involves a lot of failure, which founders at times prefer to keep quiet, and replace with unrealistic prospects, and outcomes. If handled poorly, this can sometimes completely mislead investors, causing major trust issues further down the line.

Transparency is key. When employees are provided with visibility, it becomes easier to discuss difficult times with them, and can make them more invested in the company’s growth and success, even taking pay cuts to see the business achieve its goals. It also becomes easier to ask investors for help, who often have a wealth of experience in managing businesses in difficult economic climates.

And what is your perspective on the current funding winter?

I believe the current drop in foreign investing in Africa is short-term and improvements should occur as early as mid-2024. Start-ups need to be as conservative as possible on costs and expenses and be ready.

Which specific challenges do tech startups face in the Nigerian and/or African ecosystem?

It can be quite challenging for tech start-ups running a SaaS (Software as a Service) business, as many companies in the region underprioritize tech, making it challenging to create partnerships.

Finding good local tech resources can be very difficult as a lot of good talent have moved abroad and there’s very limited programs and opportunities to upskill in certain areas of tech locally.

There is also the challenge of dealing with foreign competitors, as it is often perceived that foreign companies, although considerably more expensive, are more reliable than local technology companies in the same area.

Compare the take up of generative AI here in Nigeria compared to some other African markets.

Globally, Generative A.I. is still a very new sector of innovation. I believe Africa has so far adopted it reasonably well with many companies using it to improve their productivity. The next frontier is for Generative A.I. to emerge in more commercial operations which is where Africa may fall behind, as current LLMs do not understand most indigenous languages in Africa. However, I do expect this to change soon, especially as Generative A.I. becomes the norm in the commercial space.

Dumebi, this has been an enlightening conversation--any closing thoughts for our audience?

It is very tough to run a startup in this current climate, especially a new start-up in Africa. Regardless, you can get help if you look for it. Find advisers who are very experienced and passionate about you and your business and put them on your board. Meet them regularly whilst giving them accurate visibility of your operations, so they’re well enabled to provide you support.

Get a strong team behind you. Be frugal and only hire full-time for essential roles in development and sales, whilst I’d recommend you contract out other less essentials roles for short-term projects. Use stock-options to supplement higher salaries or strong performing employees who deserve raises and promotions. This builds them up as co-owners to your business, making it easier for them to support the long-term vision.

Focus on sales and revenue over short-term and often more costly traction. It’s important to get your business earning consistent revenue before engaging investors, putting the founders in a stronger negotiation position when agreeing on investment terms.

Of course, do your best to have fun and enjoy the experience. Hard times won’t last, so be sure to position your business well to maximize the benefit when market conditions improve.

Dumebi, I couldn’t have said it better--hard times certainly won’t last, so we all need to do our best to have fun and enjoy the experience! It’s great to see startups like IziFin who are indeed implementing robust corporate governance especially during these harder times. Thanks, Dumebi, for helping us to learn from your own experience as we continue to serve other startups, scaleups and social enterprises to deliver excellence on an increasingly global stage.

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Quote of the month: “The true mark of a leader is the willingness to stick with a bold course of action…real leaders are happy to zig while others zag. They understand that in an era of hyper-competition and non-stop disruption, the only way to stand out from the crowd is to stand for something special.”-- Bill Taylor

Read Part 1 of Sustainability via Corporate Governance