Ten years after saying goodbye to Wall Street, I started a WiFi business in Africa

Source | Zhixiang Network (ID:passagegroup)

Organize | Tang Shi (Intern)

Edit | Wang Xiaohan

\ This article totals 6401 words, expected to read 16 minutes /

Start a business in Kenya and do "community WiFi".

This year is already the fourth year that Zhou Tao has settled in Africa, and it is also the second year that his project has landed. He provides network services to 200,000 Kenyan subscribers at less than a tenth the cost of local operators. He has a team of about 200 people, but only five or six Chinese, and the rest of the employees are local youth.

In 1994, Zhou Tao gave up his studies at Shanghai Jiao Tong University to study in the United States and obtained a double major degree from Midlebury College and Ivy League Dartmouth College. After graduation, he went to Work as a financial analyst on Wall Street, but after 2 years, he threw away the golden rice bowl in the eyes of the people and went to Dartmouth College to study for a master's degree in engineering management.

In 2003, Zhou Tao returned to China, at this time when Ali, Tencent and other domestic Internet start-up, he chose to join a high-tech company Yike Sanyou Exavio, although the follow-up was not successful, but Zhou Tao has accumulated cloud computing-related experience, and then in 2006 began an 11-year cloud-related entrepreneurial journey.

Interestingly, in 2012, Zhou Tao was snatched of his mobile phone in a Taxi in Tanzania when he first set foot on African soil, and now he has an indissoluble relationship with Africa, the "last billion" land, with the help of Kenyan diplomat David.

"Sometimes you may see reports that Africans don't want to work overtime, but in fact our sales staff have morning meetings at eight or nine o'clock in the morning and have to do customer support or maintenance in the evening." Zhou Tao described his African employees this way.

Legendary experiences and extraordinary careers are remarkable. To this end, Zhixiang Network and Zhou Tao exchanged views, and the following is the content of the dialogue:

After 11 years of entrepreneurship, he finally chose Africa

JC: Hello everyone, my name is Zhou Tao, everyone calls me Tiger, and I am currently starting a business in Kenya. Before coming to Africa, I started my own business in the domestic technology industry for more than a decade. By chance, I met a Kenyan diplomat in Beijing who is now my current entrepreneurial partner.

Hu: Your experience is very rich, you went to the United States to study at the undergraduate level, worked on Wall Street after graduation, and took root in Africa after returning home. During the 11 years from 2006 to 2017, have you been starting your own business?

JC: Yes, I've been starting a business. Formal startups made three companies, starting with enterprise-grade networked storage; in 2012-2013, I did a cloud computing company; and in 2014-2015, I combined storage and cloud computing to do a so-called hyper-convergence.

Hu: Have you started looking at opportunities overseas since you were a cloud computing company? Or is it purely because of a coincidence that I met a friend in Kenya and decided to go overseas?

JC: It should be said that it started at that time, especially in my second entrepreneurial experience. In 2011-2012, I concentrated on traveling and studying in Africa, doing a lot of thinking during this time, and I have met several African friends who were very interested in my project at that time and hoped to introduce this product to Africa. After 2017, I am actually looking at some of the possibilities of products going abroad or going abroad to start a business.

Hu: At the beginning, China's going to sea was mainly based on tools, and at that time, large-scale overseas trips were relatively small.

JC: In 2013-2014, I noticed a tool going out to sea called aPaaS, and later the cheetah moved. After Abase, there are gradually some content going to sea, and TikTok can be said to be a phenomenon-level product. In 2015-2016, I made some attempts in China, made a funny website on Facebook, and in a year's time, the number of users went from 0 to 1.5 million, which was very exciting. Finally, it was found that if a long-term valuable Internet economy is to be generated in Africa, it is inseparable from the Internet, and it must be a relatively cheap network. Then I got to know David, a Kenyan diplomat who was also my co-founder.

Hu: When did you know each other?

JC: David and I have known each other for a long time. He entered the kenyan business campaign in 2012 and has a deep understanding of the various information and business environments in Kenya and East Africa. In the process, I gradually discovered that the Kenyan minister was angry but helpless about the fact that the vast majority of users in Kenya could not access the Internet cheaply. And China has a lot of technology and products, there are also practical experience, China's overseas enterprises are actually able to reduce the cost to a very low level, and the cost advantage through a cheap way to benefit a large number of users, which is actually a bud of the project I am doing now.

Hu: Did you think about Southeast Asia or India? These markets are actually larger than Africa, do you choose to go to Africa simply because you have a good network of contacts?

JC: Not exactly. I feel like I'm entering a new country and growing familiar with the local environment quickly, and it's definitely no problem. In fact, I wanted to enter Africa not just because I knew Kenya, but because I saw a "last billion" opportunity. In addition, from the perspective of long-term development, if there is less competition in the early few years, it is not easy to land with peace of mind and find a suitable solution to start development. So in the end, after much deliberation, I chose Africa.

Make the traffic price 1/10 of the local market

Hu: Can you tell us a little bit about the basic situation of the development of the Internet in Kenya at that time?

JC: In fact, Kenya has a relatively high penetration rate of smartphones and internet access in the whole of East Africa or in Africa as a whole. Because it is the main gateway to East Africa, it is also a bridgehead. Thanks to TRANSSION mobile phones, Kenya's smartphone penetration rate exceeds 70%-80% in cities. In addition, Kenya has several relatively large operators, especially Safaricom, which is equivalent to China Telecom or China Mobile in East Africa or the whole of Africa, so in several major cities in Kenya, you have 4G signals wherever you go.

The biggest problem is actually the Internet tariff, in general, 1G traffic needs to cost more than 1 US dollars. On the other hand, broadband in Africa is quite backward, because broadband needs to bring optical fiber to every household, and the cost of optical fiber is very high, and it is necessary to recycle the previous investment. Currently, only the so-called mid-to-high-end communities and people in Kenya can enjoy home broadband access, and the tariff starts at least $30 per month and generally $30 to $60. Like some countries in southern Africa, such as Zimbabwe or South Africa, the average household broadband cost of more than $100 is quite high.

For the majority of ordinary people, the environment in which they live is very crowded, and local ISP operators will not be able to do it because the input and recycling are not proportional. Residents of these places can't afford to pay more than $15 or $20 a month, so this is an opportunity for us.

There is a very important data, at that time, Safaricom had at least 10 million 3G and 4G users per month, but the average amount of data used by each person per month was even less than 1G, because the network tariff was too high. Although everyone has a smartphone to access the Internet, everyone is still unwilling to pay or can't afford to pay. So this is a foundation of our current project, and what we're trying to solve is how to provide users with really cheap network services.

Hu: How exactly do you do it? Can you briefly say that? How exactly did you achieve this goal?

Week: In March 2020, our project began to land. In fact, in the first two years, we made a lot of attempts and encountered a lot of walls, and finally we chose the path of fiber optic plus WiFi. We need to pull the network cable in each very dense residential building, connect each household or each corridor to a relatively cheap AP, AP is equivalent to a WiFi transmitter; we also need to deploy optical fiber in the community, and then converge the fiber to a large community network center, which we call pop nodes; and then from these communities, we have to establish a regional data center or network center to further converge the fiber to there; and then go through tens of kilometers of domain fiber, and finally connect to a huge core data center in Nairobi. There are some global Internet providers in this data center, such as China Telecom. From the core switches of telecommunications to our service communities, to every household in every building in the community, all the infrastructure fibers are built or organized by ourselves.

Hu: It is equivalent to providing public WiFi to everyone in the community, but WiFi needs to be charged, can it be understood?

JC: Yes, it can be understood this way. We will soon launch a free IPTV, this TV box is also using WiFi Internet access, if the user has an AP at home, they can watch high-definition network TV. Because low-income people have very limited money in their pockets, we can charge not only monthly fees, but also hourly fees, such as eight hours, a day or a week, in a very flexible way. And during the paid time period, the Internet access is unlimited.

Hu: You provide them with the same 1G service, compared to the cost of other telecom operators, how much can you control?

JC: That's a very good question. Kenyan local operators, whose cost of 1G is currently accurate at $1.1, currently have about 1.5 GB of data traffic per month for users. After two years of operation, the average community user uses close to 40G of traffic a month, and the vast majority of this 40G comes from mobile phones. We divide the actual average payment by the traffic and conclude that our 1G charge is actually $0.1, which is equivalent to 1/10 of the local market price. The cost has been equal to that of China, or even lower than that of China.

Hu: Your network fee price is only 1/10 of that of traditional telecom operators, so are you worried that local power operators will use some means to confront you?

JC: It's hard. If you leave politics aside, there will be some uncertainty. But after all, local operators are relatively commercial, not state-owned, and from a business point of view, it is difficult for them to compete with us.

Hu: How many users have you accumulated on your platform so far?

JC: It's about to exceed 200,000. From March 2020, our project began to have 10,000 users, and it took 6 months, that is, 10,000 users in September 2020. By the end of September 2021, we had 100,000 users, and now we have more than 200,000 users in less than half a year.

Hu: You just mentioned that in fact, the project officially started after the epidemic, what do you think your project encountered during the epidemic period?

JC: It should be said that the epidemic has helped our development somewhat. There was a curfew for most of the epidemic, and user habits were gradually cultivated. Of course, there are still many challenges, such as the various protective measures of employees during the epidemic have increased some burdens. On the other hand, curfews during the pandemic have prevented people from leaving the house, including our operations and maintenance and sales staff. But it also allows us to build a cloud-based model faster. At present, our entire team is close to the 200 people, usually everyone runs in the community, and the collaborative office platform organizes our enterprises through the cloud, communicating and understanding the scene situation at any time.

Hire community youth to serve community users

Hu: Only about five or six of your company's more than 200 people are Chinese, which shows that local management is very important. There seems to be a general feeling in China that African employees are more difficult to manage, and their discipline will be more lacking. From your point of view, do you think so? Or do you have any experiences that you can share with Chinese seafarers who do international and local management?

JC: I do have a lot of feelings about that. Before the project started, the very few employees we hired over the course of two years also encountered some challenges. Those people can't stay, or have all kinds of problems. But then after our project started, we changed our thinking and strategy.

Relatively speaking, Kenya's elite or highly educated white-collar workers are generally more receptive to Western ideas and culture. But in fact, his management or unit intervention context is very different from our current team, our current team is mainly from the community to find, it can be said that their general education level is not very high, especially our large number of sales staff and construction personnel, after we recruited to carry out centralized and unified training and management based on structure.

Why do we recruit primarily in the community? It's related to the nature of our programs, we're doing communities for low-income people. Users in low-income communities are relatively low-income and lowly educated, but on the other hand, they have formed a subculture in this community. Therefore, if we want to effectively provide networks and services to the community, and to market to the community, we need to rely more on the local Kenyans and these young people in the community.

In such communities, unemployment is higher for low-income people. But we're going to give them jobs, which means we're doing business while contributing to the community, so we can increase our social responsibility and impact. I think this path is still more correct.

As for your statement that the Chinese people may have a fixed stereotype of being dishonest and lazy and inferior to many Africans, I think in a cultural framework, let him see that through hard work, through hard work, he can get a better life. I'll give you a simple example, when it comes to Africans, sometimes you may see reports that they don't want to work overtime, but in fact our salespeople have morning meetings at eight or nine o'clock in the morning, knock on doors in the community every day to do marketing, and in the evening, they have to do customer support or maintenance. I often see a lot of sales in the middle of the night at eleven or twelve o'clock in the afternoon, sending feedback problems. The same goes for our operations team.

Hu: How did you do that?

JC: In fact, we did not have the concept of overtime from the beginning, our original intention was to serve our customers well. And the relationship between our customers and the employees we recruit in the community, if not brothers and sisters, is that many of them are of the same clan or the same tribe. Therefore, we advocate that the collaboration between the internal team and the team is an upstream and downstream service relationship, that is, our construction team must do a good job in quality and serve our acceptance team. Because the acceptance team and the operations team are combined, the operation and maintenance must be raised to the standard. In this way, the pressure on their future operations will be reduced. The operation and maintenance team must serve the sales team, and the construction team must also serve the engineering team, and they must serve the sales team. In this way, the sales team can better serve our customers.

Ultimately, all of our team members, including administrative personnel, are not in a management role, but in a service role. We want to serve all of our employees so that they can sincerely serve our ultimate customers. Everyone gradually developed a sense of service, and they did not care too much about working hours or work intensity.

At the same time, we began to consciously strengthen some social responsibility or community activities. Through these activities, we make everyone feel better, these activities we organize bring various values to children or adults in the community, they will make them feel very happy and increase their enthusiasm, and they really feel their own value.

Hu: I would like to ask you, how much can the unemployment rate of young people in Kenya reach now?

JC: I saw a statistic that in Kenya, salary workers belong to fixed jobs. And this salary worker makes up only 5% of Kenya's entire population. And 74 percent of the 5 percent of salary workers earn no more than $450. That is to say, there are actually quite a few people in Kenya who are in formal jobs, and even if they have formal jobs, their average income is quite small.

When you get to the African community, you will find that the whole community is almost a big market, everyone lives in the two or three floors to seven or eight floors of the building, the bottom is the so-called bottom merchant, under each small building is a very small shop, there are stalls in front of the small shop, forming a crowded scene.

So it feels like everyone doesn't have a formal job, but you'll find that the business atmosphere here is very good. For example, we are in Kenya or some good parts of Africa, at night, you can't see anyone on the road, the lights are dark, and the shops are already closed. But in the community, at nine, ten o'clock or even later in the evening, there are still many lights on the streets, because people are still making transactions, because everyone wants to survive, and they have no concept of time.

Speaking of which, I also feel that if we are recruiting some white-collar employees, we may have a lot of opinions about overtime. But in the community, the young man does not have a concept of overtime because he has never officially worked.

Hu: Understood. I think we need to change the impression of African youth, and the mentality of everyone as a whole is the same, it's all about life, right?

JC: Actually, some middle- and high-income people in Kenya also have an inherent impression of the community, such as dirty and messy, even robbers, they dare not go. My local partner is born and raised in Nairobi and he has had a similar impression before. But he would now tell his Kenyan friends that I had brought him into the community and he had found that the community was safe, that everyone was friendly, that they were doing business calmly, that there was nothing too messy about.

Hu: I would like to ask you again, in addition to Nairobi, Kenya, is there a lot of countries in Africa that have a high level of economic development, and the entire stage of Internet development is actually quite close? If this model has been verified in Nairobi, can it be extended to other geographical regions? What are your plans for the next three to five years?

JC: Yeah, there's a big plan. We plan to cover all the urban populations in Kenya over the next four to five years, and at the same time, we want to start radiating to some of the surrounding regions or countries in a down-to-earth manner next year. Because this model has been relatively mature through several years of construction, in the relatively dense urban population areas, basically can be landed, can be quickly built.

In the next decade, we expect to provide access to cheap access to the vast majority of the populations of Africa's large populations, at least fifteen or twenty, in the vast majority of cities and towns, in a country with a large population. The second point, after they have a cheap way to access the Internet, they begin to build an ecology on this basis, and establish a large ecological sequence.

This can be used to cloud computing that we have been doing in China for many years. In fact, our current cloud computing is also an infrastructure, when you have a network, you have to start data services, in the App area. We will also use a relatively cheap way to build a distributed cloud computing data center, and begin to carry the main Forms of the Internet, such as network video, O2O business model, but also involving logistics, information flow, payment, finance and so on. This is not to say that we all have to operate on our own, when we have a network foundation and a user base, we will also be very welcome to cooperate with Internet developers.

Hu: I think what you're doing is very meaningful, if it can be made into an entrance to the Universal Internet, in addition to the middle class or higher classes in Africa, you can also make the Internet accessible to many ordinary communities. Attracting more people to access the Internet, then your side becomes a door, and the area here can actually link more applications and establish a larger ecological flow channel.

What do you think of the prospects of Chinese overseas companies in Africa? What other opportunities do you think we can focus on and capture?

JC: I think there are still a lot of opportunities. There is a domestic condition that is actually a bit similar to Africa, that is, population. We did not choose India more inclined to choose Africa because, relatively speaking, although the tribal cultures of Africa are very different, the colonial history has made their languages more uniform. From an ethnic point of view, although there are many local linguistic tribes, from a historical point of view, the roots of several major tribes in Africa are relatively similar. But the differences in India are too great. We feel that homogenized people or regions can quickly promote the Internet.

I think that in the future development of Africa, as long as the infrastructure is well established, it is a great opportunity for more Internet companies in China. This opportunity is a vast virgin land. You can work on it, and the competition is relatively not so fierce.

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