Mxit: Michael Jordaan’s next big thing
Michael Jordaan won plaudits for his time at the helm of First National Bank. When he said earlier this year that he’d be stepping down from his role as FNB CEO, he said he might be interested in getting involved with “innovation technology”. On Monday, he announced his first post-FNB role: as the new chairman of the board of directors for cellphone-based social network Mxit. REBECCA DAVIS asked Jordaan what he had in mind for the position.
In May, Michael Jordaan announced that after ten years as CEO of FNB, the time had come for him to step down as of the end of 2013. Jordaan indicated that the commute between his Johannesburg office and his family home in the Western Cape had taken his toll, and that he wanted more time to spend with his family, and to travel. At the time, he said that he would still be interested in getting involved with the entrepreneurial space in some capacity. Jordaan stressed, however, that his future ventures would not be in the financial sphere, because he would not compete against his “spiritual home” of FNB and FirstRand.
His first post-FNB project has now been confirmed: Jordaan will join Stellenbosch-based social network Mxit as the new chairman of the board of directors. It makes sense that one of Jordaan’s next forays would be into the digital realm, because his time at the helm of FNB was characterised by a high degree of technical innovation. Under his stewardship, FNB launched the country’s first banking app, and became South Africa’s largest vendor of iPads and iPhones. In 2012, FNB was named “the world’s most innovative bank” at the BAI Finacle Global Banking Innovation Awards, for the implementation of digital and mobile banking solutions like eBucks and eWallet.
Jordaan’s regular engagement on Twitter also earned him a reputation for being one of the country’s most tech-savvy and accessible CEOs. “I just think there is a great conversation that is happening out there and you can take part in it,” he told an interviewer earlier this year, adding: “It’s the closest thing I have to keeping a diary of my observations.”
It’s fair to say that Jordaan must have been courted heavily ever since announcing his resignation from FNB. But he told the Daily Maverick via email that Mxit particularly appealed to him for a number of reasons. One of these reasons is prosaic: “It’s Stellenbosch-based, so there’s no commuting,” Jordaan said. His other reasons are based on a belief that Mxit is well poised to meet the future needs of both the country and the continent.
“[Mxit is] mobile, which is the big trend globally, if not the biggest trend right now,” Jordaan said. “It focuses on the youth segment, which is the future by definition, and it has big potential to scale across the rest of Africa. [Mxit] also does lots of good work in education in South Africa, which is the single biggest challenge our country has.”
The news that Jordaan is joining Mxit will likely provide a needed confidence-boost for the company. Mxit has around seven million active monthly users, but the sudden departure of former CEO Alan Knott-Craig Jr last October seemed to leave it in a jittery mood.
In December 2012, Mxit announced that it had “accepted the voluntary retrenchment of 41 of its employees”. At the time, acting CEO Francois Swart explained that the staff cuts were due to the fact that the company wanted to double its user base by the end of 2013, and that to achieve that, “we need to take a very focused approach to what Mxit does and does not do. Regrettably that means stopping or cutting back activities in some areas”.
But analysts suggested that Mxit was also undergoing something of an identity crisis. The growing dominance of instant messaging clients like WhatsApp and BBM has seen Mxit’s personal messaging volume drop over the past year. For the first time this year, too, Facebook overtook Mxit as the largest social network in South Africa. Tech bloggers have speculated over what Mxit’s primary function should be. “Mxit is not a pure IM platform like WhatsApp, nor is it a rich full social media platform such as Facebook,” one wrote in July. The words “repositioning” and “reinvention” have been bandied around a lot.
It was only last week that Mxit finally announced a permanent replacement to Knott-Craig Jr in Francois Swart, though Swart had been in the role in an acting capacity since last October. Swart said last week that Mxit was still a very strong brand. “South Africans spend more time on Mxit than any other social network,” he told News24. “"Our top priority over the next few months is to show the business community what a powerful platform Mxit is to reach the youth of South Africa. There is nothing else like it."
Jordaan says that he thinks Mxit’s particularly unique appeal is in its use of technology to provide community-based services in fields like education and healthcare. For some time, Mxit has been experimenting with ways to leverage technology to address social problems. In August, for instance, the company released a Rape Crisis app to enable rape survivors to easily access information such as how to report rape, and what to expect from a forensic examination and the court procedure.
As elections approach, political parties have also latched on to the mobilising potential of Mxit, particularly as a result of its reputation for youth popularity. Agang announced in July that people could register as members of Agang on their Mxit app, and earn airtime by signing up others: R1 worth of airtime for every one person signed up. Agang said that it believed Mxit was an important channel “to reach young people in particular”.
“Mxit’s traditional strength is in the youth segment,” Jordaan acknowledges. But he says that Mxit’s future growth likely lies outside South Africa, within a market which doesn’t yet have much access to smartphones. “The biggest growth potential remains the rest of Africa and India, where feature phones will remain relevant for quite a few years to come. All the decision-makers have smartphones, and therefore underestimate how big the feature phone market remains.”
Jordaan sees his new Mxit role as “strategically tight and operationally very loose”, saying that he will be advising CEO Swart and helping set strategy. He won’t be paid, and neither will he receive any shares. “I would like to remain independent and non-executive,” he explains. “Over the longer term, I may invest as well. I am in the fortunate position that I do not have to work, but choose to do so.”
One of the first hints that Jordaan was involving himself with Mxit was a tweet he posted on Monday morning, saying: “Great speaking to Mxit staff as their new chairman, using quotes from Game of Thrones and analogies from Breaking Bad.” What exactly, pray tell, does he feel the abovementioned TV series have to teach Mxit employees?
“I used two lines from Game of Thrones: ‘Winter is coming’ – which speaks to the forces of change and the need to get ready for it – and “If we die, we die, but first we live’ – which speaks to taking risks and living in the moment,” Jordaan explained. “Breaking Bad demonstrates the hubris that can develop when a startup becomes too successful, too fast. I do wish that breaking good were as cool as breaking bad.”
Jordaan says that back at FNB, his replacement Jacques Celliers is in “the driver’s seat”, with Jordaan moving to the back seat. Celliers is “by all accounts doing a great job,” Jordaan says. “I am there for advice if he or any team member needs it. Right now I am using up my leave that accumulated over many years.”
A last question: does Jordaan have a personal response to the Ayanda Mabulu painting controversy at this year’s FNB Joburg Art Fair? Jordaan’s not interested in taking the bait. “Nope,” he says. DM
- Michael Jordaan to chair Mxit, on TechCentral
- Africa’s Most Innovative Banker – FNB CEO, Michael Jordaan, on Memeburn
Photo: Michael Jordaan and Mxit CEO Francois Swart. (Photo by Mxit)