Jamarlin Martin catches up with Tayo Oviosu at SXSW 2018. Oviosu is the Founder and CEO of Paga, the leading mobile payments company in Nigeria. They discuss building Paga, bitcoin prospects in Nigeria, Elon Musk, Aliko Dangote, why the African economic opportunity is really Nigeria, superior Nigerian academic performance in the US, and whether Tayo would ever run for President.
This is a full transcript of the conversation which has been lightly edited for clarity.
Jamarlin Martin: You're listening to GHOGH with Jamarlin Martin. We have a go hard or go home approach as we talk to the leading tech leaders, politicians and influencers. Let's GHOGH! Today we're talking to the founder and CEO of Paga, Tayo Oviosu. We're going to dive right in. We're here at South-by in Austin. Tayo, tell us a little bit about Elon Musk. You know, you were there for his speech today. Unfortunately you left that speech to come here. Thank you very much. But tell us about that.
Tayo Oviosu: Jamarlin, thank you. It's very nice to be with you again. Just hearing Elon and seeing him in person, was very inspiring. He talked about the big bets that he's made, you know, and how he took the $180,000,000 that he made from PayPal and split it between Tesla and Space X and figured that he would put $90,000,000 into both of them and still have $90,000,000, and that's still a lot of money, right? And make a big bet because he didn't want anyone else investing. But of course it took more money and eventually it literally took all his money, but it was inspiring to hear him talk about how he's going after these big bets and actually got to the point where he actually had to borrow money for rent in 2008, and had to face the possibility of failure of both of them multiple times and where they were just living by the skin of the pants. He said that he eventually got external investors and that's been allowing them to actually move forward with their dreams. But there are a few things that he said that I took away. One was just about how, because one of the questions was how does he juggle his time, you know, with these two big projects that he's working on, you know. And he said most of his time is actually on Space X, and then what he does is someone who's running the business side allows him to be on the design of what's going on. And he made a statement about how it's so important to be in the detail to be able to make good decisions, and that's where he spends a lot of his time understanding the detail from all the brilliant technical people that are working with him. And that really struck a chord with me.
Jamarlin Martin: OK got it. So you talked about Elon Musk, going all in, betting pretty much his entire wallet, possibly risking debt on these highly risky projects or businesses. From a textbook perspective, explain the relationship of the textbook MBA with what finance and consulting will say, 'oh, that's dumb'. You know, you bet everything on these highly risky projects on this spreadsheet that just sounds retarded, but they work and you're a genius. Can you talk about kind of that relationship?
Tayo Oviosu: Yeah. Interestingly, I remember one of the things very well from Irv Grousbeck, who is a professor at Stanford Business School, and one of those who started what we all know as AT&T Cable today. He said to us, don't invest your own money in your startup, right, because you're investing your time and energy already, raise money from other people. And I remember even at Paga that I had to put $40,000 at some point after bootstrapping, when I put almost $100,000 bootstrapping. And I was like, man, you know, should I do this? You know, so I think from a textbook perspective, the answer is typically don't do that because at some point you may not be able to take a salary and you can take care of yourself and make sacrifices that your investors are not going to pay for. But in reality sometimes you just have to, right? And I think for most people you may need to put some money to prove the business to a certain point. But I think Elon, he was even at a place where he said he wasn't even going to take money from his friends because he was going after these really crazy ideas. And which is why nobody else is really doing it. Who else is doing something like Space X? The only other person is Jeff Bezos, who is also equally wealthy and he's just using his own money as well. So I would say for that for the most people, while we may look at that story, that story is not the norm for most people. I would say try your very best to raise money from other people, demonstrate progress and find people who believe in you, who would invest in your business so that you move forward.
Jamarlin Martin: Do you believe there's a material relationship with Elon Musk, a background out of South Africa and Canada, that gave him an advantage in terms of how to tackle some of the same opportunities that Silicon Valley are going after?
Tayo Oviosu: I'm not sure to be honest. I mean, I have to imagine that somehow his background and his upbringing must have helped him in how he perceives the world and how he perceives what he is capable of doing and why not him, you know. And the example is with The Boring Company, which he says he spends only two percent of his time on, but 20 percent of his tweets, so he seems like he's spending a lot of time on it. But he said that that's an idea that literally came from him joking all the time about somebody needs to build tunnels in Los Angeles, and three years in, nobody was building tunnels. And it's like, why not me? So I think there's something that he has already in his background that allows him to say, hey, why can't I do that? You know, it's the same thing with Space X. He was really about like, why is NASA, and why have we not achieved Mars, you know, after all these years of landing on the moon, why have we not gone back? And then eventually he was like, OK, why not us? Why can't we be the ones to do this? And I definitely do think upbringing helps with that. Right? And just that understanding that, you know what, nothing is beyond me. And if I fail that's fine, but nothing is beyond me to try.
Jamarlin Martin: We met in Lagos in 2012. What do you remember about that crazy guy? He wants to meet? I don't really see these guys out here. What were you thinking?
Tayo Oviosu: I thought, I thought it was. I mean, there, there are a couple of people I've met who said I just want to understand what's going on and I appreciate that. And in fact, funny enough, someone I met on my first day here at South-by, he was like, yeah, I hear all this stuff about Nigeria and, you know, how should I learn more? And I said just come, and then he started telling me about how he doesn't have that much money. I said, no dude, if you come, you can stay at my place.
Jamarlin Martin: I remember in college, you know, there was a big concept in terms African Americans are becoming Afro-centric. To show your thinking that people are culturally conscious, but I don't remember anyone actually flying out of Atlanta just to go see Ghana, or going to Nigeria.
Tayo Oviosu: You're seeing it more now though, you're seeing it. Yeah, we're seeing a lot more. I've had a number of interns who reached out and they're like, I just want to come see what's going on. The current CFO of Stripe, this was way before he even joined Stripe, and he just showed up in Lagos. He knew one person who had lived in Nigeria and introduced them to a few people, he had no real purpose, just to come understand.
Jamarlin Martin: What about African Americans?
Tayo Oviosu: African Americans are fewer and far between. They'll come, but I do think you're seeing some and some are actually staying to work there as well. Well, Ghana I think is more of a destination for some reason.
Jamarlin Martin: You know, a lot of people recommend, at least for African Americans that Ghana should be your first stop.
Tayo Oviosu: I don't know why that is actually.
Jamarlin Martin: They say with Cape Coast Castle, a lot of slaves went through there in terms of the democracy and the government, they say to start off with an appetizer.
Tayo Oviosu: It's a bit easier to just land.
Jamarlin Martin: Talk to us about your personal story before you got to Stanford.
Tayo Oviosu: I finished secondary school around 16 or so, and it was right around the time where the Nigerian president, we just had our first democratic elections in a very long time, but those were annulled, because I was out of school for a year or so, and during that time was able to convince my mom to let me look at going to school abroad, and so did my SATS and did all this stuff, and eventually got admission to a junior college, Bakersfield College in California. And you know, I was actually yesterday just talking to some friends about this, about how Bakersfield, a small little town in the middle of California, most people just drive by on highway five, but it'll always have a special place for me because I met some amazing people who are just so nice and who really helped me achieve to where I am today. Whether it was, I went through times where I could not pay $50 for rent, right? And I was working five jobs, right. Um, just to try and make ends meet. My friends wanted to go to the movies and I'm like, oh, I'm doing something. But really, I couldn't afford the $5 for the movie. All of that for me just to build character. Right. And really helped me realize that my current situation, now as I was always very clear about this, that my current situation was not going to be a predictor of where I was going to be in the future. So at Bakersfield College I was a janitor. So after school was over I was mopping the floors and my classmates were sitting right there.
Jamarlin Martin: When you say Bakersfield, you were talking about outside of Los Angeles?
Tayo Oviosu: Yeah, just outside. It's two hours north of Los Angeles. And so from there then I transferred to USC, University of Southern California and did electro engineering there. And after that I went to work for a couple of startups in Los Angeles and then to Deloitte Consulting in San Francisco. So I did that for about three years before I went to business school.
Jamarlin Martin: OK, got it. You know, one study that came out said that Nigerians outperform all immigrants and Americans at academics here in the United States. Why do you think that is? Why are you guys killing everybody?
Tayo Oviosu: You know, this is the third time I'm being asked this question in two weeks. And it's interesting in different flavors, but the truth is I actually don't know the real answer to the question. I do know this, from my parent's generation, there has been a focus on education and a focus on people trying to learn, right? And to better themselves. And I think for all of us, we take it from different perspectives. So when I recently interviewed my friend's dad who's 80 now, and he was just a math whiz, his perspective is that, you know, the opportunities that he got back in the sixties to go abroad, he felt and he was the first electrical engineering professor for Nigeria in electrical engineering, professor in a Nigerian university, that he had to come back immediately after his education in London because he had to come back and give back because he's felt so fortunate to the opportunity he had been given. And I felt something similar when I went abroad and I felt, especially from having been given this opportunity to go study abroad, I'm going to focus on doing well and I'm going to bust my ass, right, to learn and do well. And that was my sole focus. Actually Austin was the first place that I ever had alcohol. And that was like two years after Undergrad. Just to give you a sense that in undergrad I did nothing, other than study, and be part of student life running for Senate and things like that, at USC. So I think for a lot of Nigerians it's that sort of pressure of like we've got to do well, we've got to make the most of the opportunity we have and I don't think we're somehow genetically better positioned than anybody else.
Jamarlin Martin: Yeah, I think you make an argument that the cultural tradition in terms of putting a premium on education, that's kind of powered...
Tayo Oviosu: That has powered a lot and it's still there. Right? So in Nigeria as bad as our education system is, and it's actually fairly bad. Most people go to private schools up to university across all economic levels actually.
Jamarlin Martin: But I would argue a lot of African Americans will say, 'hey, you know, the reason people from the Caribbean or Africa perform better, they take advantage of more opportunities in the United States is the best come over here'. But I don't think the data really supports that view. Even when you adjust for parental education income, you adjust for other variables, the Africans are still outperforming the Africans who are born in America. I definitely think it's cultural.
Tayo Oviosu: Oh, I mean, I agree with that, because I meet a lot of Nigerians who are trained in Nigeria and I are just ridiculously smart and I have some in my company, so I think some of us have been given a very fortunate opportunity to be able to go abroad and get an education, but, I think it's more that from a young age, people pay a lot of premium to making sure that kids are educated, and I say something that Nigeria is a very interesting place, because no one is upset that Aliko Dangote is the wealthiest black man in the world and he's such a humble person when you meet him, and at the rate of growth of his wealth, he is going to be the wealthiest person in the world in our lifetime, right? But no one's upset about that. They actually, no matter where they are, they believe that their child can be Aliko one day. Right? Even if they're not there and they actually really believe that, it's a blessing and a curse, because we're very superstitious people. Right? So that blind faith of like, wow, yeah, my child can one day be Aliko and I have to give him an education or her an education to give them the chance.
Jamarlin Martin: Can you tell our audience who that is and what he does?
Tayo Oviosu: Yes. Aliko Dangote is in several businesses, mostly commodities based businesses. But he owns a cement business, which is the primary business that has brought his wealth. But he's actually in several different businesses and he's the wealthiest black person in the world and he's Nigerian, and he is doing a lot of interesting things in Nigeria. As an example, right now he's working on an $18,000,000,000 refinery project to build the first private refinery in Nigeria. Nigeria is the eighth largest producer of oil in the world and we actually import. We import refined crude. So I think it's going to be very transformational. You know, the cynics will say that, oh, well the government's going to have to give him crude at a discount etc. But I'm like, look, he's spending all this money doing this and in the long haul, it's a great thing for the country.
Jamarlin Martin: Some people say that under the Obasanjo regime. Actually my very good friend, is former president Obasanjo's son with Stella Obasanjo, rest in peace. Some people will say he benefited a lot from government schemes in terms of cement and kind of blocking other players in the market. Do you think that criticism is fair in terms of some of his early advantages?
Tayo Oviosu: I think he's actually honest about it. Yeah. I was blown away. He had about 12 of us that met with him once for breakfast and he was very candid about how could have lost all his money when he was importing rice and rice imports were banned all of a sudden. And he had to put all his money into an import that was sitting at the port already. And if he was stopped from getting that out, he would not be where he is today. I think he's very honest about sort of the opportunity that government gives. But I actually don't see a problem with that because I think in any emerging market, I'm very comfortable with a few people owning the commanding heights of any economy because the more competition you gave in the very beginning, the harder it is to actually make progress. And I think that's fine to get a few people become very wealthy as long as they do what they're actually set out to. So he's doing it right. I mean there's some policies that, quote-unquote, he's the one pushing which are not true. So for example, on tomatoes, I don't think he's the one really pushing for that, for that policy, for no importing of tomatoes, because at the end of the day when you want to put in tariffs and things like that, you want to have a local industry that already works. But I'm very fine with the idea. If we think for a second that Facebook, Microsoft, Google are not in Washington lobbying for things to benefit them, then we're fooling ourselves, right? And I see him doing exactly the same thing that businessmen or women would do anywhere else in the world, which is they will go to government and try and find advantages for their own businesses. Absolutely. Why not?
Jamarlin Martin: You're very vocal. I don't see a lot of entrepreneurs speaking out on political affairs. You're vocal and critical of a lot of people in Nigeria. What do you think about the Obasanjo regime? If you like what you're hearing, you can check us out at Moguldom.com. That's m o g u l d o m.com. That's moguldom.com. We have the latest information on tech, crypto, the business of Hollywood and economic empowerment. You can also check me out on Twitter at Jamarlin Martin. Let's get back to the podcast.
Tayo Oviosu: I have a mixed view. But the first one is really that he actually set us on a path that allowed for the private sector to be well entrenched in Nigeria, to the point where for the next regime to him, we had a person who unfortunately was ill, then eventually passed away, but for nine months we didn't know where he was and what he was doing. Well, we knew where he was, waiting to know how well he was and the military didn't come in. Right? And that's because the private sector was now very well entrenched and I think it's even more entrenched today. And we had a similar encounter recently with the current president as well. I give a lot of credit to Obasanjo for making sure the private sector was well entrenched. On the other hand, I think his administration and the ones following, there was also a lot of cronyism, you know, and he would of course say that he's not part of that, etc. But the evidence shows that there was just a lot of Nigeria's wealth that was just taken out. And, you know, corruption's around the world, right? So for me it's not actually about zero corruption. For me, it's about can you get the job done right? And I say, look at China, right? I mean, I'm sure people are corrupt, right? Look at the Middle East. But the point is, are people getting the job done right? I actually had a very interesting experience late last year. I went to Abu Dhabi, had a flight leaving from Dubai at 10am, left Abu Dhabi at seven, beautiful highway, headed down to Dubai, stopped to get Mcdonald's, dropped off my rental car in time, made my flight on time. It took me less time to do that than to go from Lagos, Murtala Muhammed Airport to my house in Lekki, which is without traffic, 30 minutes, maybe 40 max, right? I mean, and that drive. And so it's just amazing where you just say, look, in a shorter distance we can't even make it happen. And here we are in the UAE and they've just made this infrastructure. And I'm sure there's some corruption there, but at least they are delivering for their people.
Jamarlin Martin: It's clear you have a lot of passion for your people, for your country. Could you see yourself running for president of Nigeria one day?
Tayo Oviosu: No, there is no possibility.
Jamarlin Martin: No possibility?
Tayo Oviosu: They will kill me. You know, right. Because I will be so brutal that I don't think I'll survive. So that's why...
Jamarlin Martin: You think you would be Murtala Muhammed, the Nigerian JFK that would be assassinated.
Tayo Oviosu: Yeah, pretty much, because I would literally let go of a third or half of the entire civil service in one fell swoop and I will be very strict on incompetence, and that's the biggest frustration I actually have with the Nigerian government and with a lot of people that I run into. But someone said it to me recently, he said, you know, it's hard to ask from people what they don't know or what they haven't experienced. So I don't have the patience, which is why I'm always very thankful to people who do go into government.
Jamarlin Martin: But are you the guy though, you're educated at USC, Stanford, you know, you have global exposure, but you're analyzing your fellow Nigerians where, hey, you guys are not up to speed like I see it in other places. Do you believe that competency is there where you're judging them fairly?
Tayo Oviosu: So I do believe that there are people who are very competent who do a great job and they will eventually get there. So as an example, we joke about it, but I feel very seriously that one day my co-founder is going to run for office and I will be the first person to support him and I can see him having the patience, certainly has the brilliance to do a fantastic job and I think he would. So there's another friend of ours who is currently considering running for governor of one of the states and you know, I would more than happily support from the sidelines. The way I see myself running is to be able to finance other people who have the patience to go do it. I just don't have the patience and I think the way I would approach it and I'm also not politically correct and I'm always having to apologize. I'm always having to apologize to the central bank guys. I'm like, look, just always remember that you're talking to someone who's very Americanized. So just remember that, right? I had an experience where the central bank called for a meeting, and the meeting was on a Tuesday, but I was in Abuja, and going to be leaving Abuja on Monday and I couldn't change my flight. And I wrote them. I said, 'oh, it's a shame that we're being told last minute about this meeting because I would have been able to move things around. But at this point I can't', and I got a call back from someone and he said, what do you mean by, it's a shame. You said we shamed you. I was like, no, no, you didn't shame me. Like I was just saying, oh, it just sucks because it's unfortunate. When we hear it's a shame, we're hearing that he shamed me. What did we do to you? And I tell the story because it just showed me and I was like, wow, thank you so much for calling me to tell me this because you would have just been there upset at me and I wouldn't have even known. Right? But I tell the story because also part of why I don't think I could go into politics is I think the way I think, the way I perceive things is so very different than how a lot of Nigerians do. And I think that would be very challenging for me. So the way I sort of look at my being back in Nigeria because I want to be part of building Nigeria to become the giant of Africa again, and I see what we're doing at Paga absolutely squarely doing that. And for me it's about how do we make it easy for people to get paid and how do we bring financial services to the mass market and if we can do that, we can help lift people out of poverty. And I think that's such a big, hairy, audacious goal to go after that I'm very happy to know that my part in all of this is to do that right. And to bust my ass to do that.
Jamarlin Martin: From a policy perspective, if a significant amount of African Americans were able to trace their lineage back to Nigeria, myself, I'm Yoruba, I traced it back, but do you feel like you could support something out of Nigeria and Cameroon or Ghana where there's some type of dual citizenship available for, you know, west Africans who came to America from slavery? In terms of like, hey, America is not enough in terms of our cultural heritage?
Tayo Oviosu: No, absolutely. Why not? I think I'll be very open to that idea. Yeah. I have a friend who is African American and I don't even think he's traced, but he's married to a Nigerian and he loves Nigeria. I mean, like sometimes I talk and I'm like, man, like what is it, you know, but he just loves it and he's doing very well in his job there and career there. And I don't see him moving. Right? I mean I think I have two friends, like that actually.
Jamarlin Martin: Tell our audience what Paga does.
Tayo Oviosu: Yeah. So Paga is Nigeria's largest mobile money operator. We exist to solve two problems. One is how do you make it easy to pay and get paid in a country that is extremely cash-driven. And the second is, how do you deliver financial services to the mass market? We have 180,000,000 people in Nigeria, only 30,000,000 of them are banked, and even for those 30,000,000, more than half of them think of their debit card as an ATM card just to pull cash out of the machine. Right. Um, so it's a very cash-driven society and what we want to do is just build an ecosystem that makes it easy for individuals to send money to each other or to pay for businesses and to get financial services to the mass market to bank the unbanked.
Jamarlin Martin: How big is the opportunity in Nigeria for you?
Tayo Oviosu: Yeah, commercial opportunity, you know, look, I think we'll build a $1,000,000,000 company, one and a half billion dollar company in Nigeria over the next five years. I really believe that we're onto something. So we're actually in the middle of the next round now, so fingers crossed we should close it and announce very soon. But fundamentally the opportunity, I think the shear size of Nigeria is sometimes very hard for people to understand. What I say to people just to help them get a context of it is, look who thinks China is a big deal today? And everybody raises their hand. Well, 80 years from now Nigeria is going to be bigger than China.
Jamarlin Martin: That's one thing I remember when we met in 2012. At first it sounded arrogant. You know, you said, hey, the African growth opportunity is really Nigeria, sounds funny coming from a Nigerian, right? But tell our audience why the facts proportionally support that statement?
Tayo Oviosu: I hate when people, well, not hate, but you know, when people say, well, Africa is the last frontier or the next frontier. I'm like, no, it's Nigeria. It's not Africa. With all due respect to all the other countries, Africa is going to go the way Nigeria goes because of the sheer size of the country and the economic opportunity. Lagos State, where I live has 20,000,000 people and has a GDP that makes it, if it was its own state, its own country, the fifth largest country on the African continent. Port Harcourt, which is in River State in Nigeria, if it was a country would be the ninth largest economy on the African continent. So there are at least the three cities in Nigeria that are bigger than most countries on the African continent. So if there's any business that is thinking long-term about their opportunity in the world and the global landscape, they have to be thinking Nigeria. Last year we saw Coca-Cola buy into Chivita, a local company, as a way to really expand. It was already in Nigeria, Coca-Cola was already in the Nigerian market, but actually a way to expand its Nigerian operations. We saw Kellogg's coming for almost half a billion dollars into the best and most respected brand in Nigeria, Indomie, through the distribution company Dufil. And that was also a multi-million dollar deal, 100,000,000 dollars, more than a hundred million-dollar deal. And, you know, I think these are companies that are looking long-term for their market growth and realizing that they have to be in Nigeria. So as the way people are thinking about China and India is the way people will be thinking about Nigeria. So for all the good things people talk about, I'll use Rwanda as an example and I love Rwanda, I got married there. Beautiful country. But it's so small that anyone who's starting anything there is going to immediately have to be thinking of a second market. And when people ask me, 'is Paga going to go outside of Nigeria', I said, yeah, one day, but we have such a big opportunity in Nigeria alone that I may not be at Paga by the time where we're really going outside of Nigeria. Right? And maybe I have passed on the baton by then.
Jamarlin Martin: Is anything related to blockchain in your roadmap?
Tayo Oviosu: Not right now. My CTO is actually quite keen to take some time off to go and just study on blockchain and really think through it and think through what and where we can use it, I mean the initial uses we can think of is to get rid of the distributed databases that we have because if you look at our system, we have about four, live versions to ensure that we never lose data of what's going on on the system, to show our customers that we're never going to lose their their data or their money and we monitor those real time very closely. So I can see us doing something with blockchain down the line. Currently the Nigerian central bank is not very positive to cryptocurrency. Bitcoin transactions are growing, but licensed financial institutions in Nigeria are not allowed to hold it or allowed to treat it, so we can work with other companies who are..
Jamarlin Martin: Would it be fair to say it is an underground market. Meaning legitimate businesses are handling Bitcoin transactions...
Tayo Oviosu: Legitimate businesses are, especially because it's been hard to get currency out of Nigeria lately, and so a lot of companies have used Bitcoin.
Jamarlin Martin: And do you view Bitcoin as competition with Paga?
Tayo Oviosu: No, I don't.
Jamarlin Martin: Why isn't Bitcoin a threat to your business?
Tayo Oviosu: Yeah. I don't think it's a threat because I think fundamentally central banks and including the Nigerian central bank are not going to allow Bitcoin to become the currency in their markets. I do think at some point in our lifetime we will have at least one country go hundred percent cryptocurrency and it will be their own currency they'll create. So because of that, I don't see Bitcoin as competing, but I could see us allowing people to trade and use Bitcoin. Right? But if you think about Paga today and what are the use cases for Bitcoin? It's really around remittance as the biggest use case. So in Paga you hold a digital wallet similar to PayPal, you can put cash in it. If you have a bank account, you can link your banks, you can put your cards on it. So if I want to send Jamarlin money, on Paga I send him money and he gets the cash in real time, instant real time. So in that transaction, Bitcoin does nothing for us at all because you can now take that cash, use it on Paga, move it to your bank if you want, right? Or cash it out if you want. So Bitcoin has no real benefit. In fact, with Bitcoin, I now need to remember this. I have to create this wallet, and if I lose my key, I lose my wallet, which actually happened to me.
Jamarlin Martin: Are there any blockchain businesses that you see coming into Nigeria that could be a threat?
Tayo Oviosu: Not yet. There may be, but I don't see any yet.
Jamarlin Martin: Special thanks to Tayo, you can check him out at Mypaga.com. We really appreciate you coming through.
Tayo Oviosu: No, absolutely. Thank you very much. This was fun.
Jamarlin Martin: Thanks everyone for supporting the GHOGH podcast. You can check me out at Jamarlin Martin on Twitter. You can also check us out at moguldom.com. That's m o g u l d o m.com. Let's GHOGH!
This interview has been edited for clarity.