After graduating from the University of Manchester in 2005, Jason Njoku already knew paid employment was not for him. Ten failed businesses later, he was starting to have a rethink. But with a resilience that seems common in successful entrepreneurs, he kept going. You might know him for his brash demeanor, but you can’t fault his ability to yield results when it comes to internet businesses as he has shown with iROKO Partners. Between taking shots at Otekbits’ name, talking about past failures, and sharing the plans he has for SPARK, I learned more than a few things from Jason.
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IT STARTED WITH…
You finished school in 2005 and you started iROKO Partners?
iROKO started in 2010. Between 2005 and 2010, I had several businesses, ten businesses in fact. They went from a t-shirt fashion brand to a student magazine; I had a web development store, I had all sorts of different weird and wonderful ideas. I had an event marketing company.
Over a 5 – 6 year period, I basically had ten failed ventures. iROKO actually started off as a side project as one of my ventures was failing at the time, so it kind of grew from a side project and just moved to become more and more of my life.
When you say failed, what’s your definition of failure? It didn’t last for long?
So, failure is when you put three years of your life, about a hundred thousand pounds and you basically get nothing back in terms of revenue or anything like that whatsoever. Failure is when you spend the year trying to do something and you still end up with nothing to show for it. Failure is failure. I think failure is relatively easy to judge – if you are in a business and you’re not making any money, then you’re a failure.
If I think of Amazon, they weren’t profitable for a long time; they don’t consider themselves a failure.
I didn’t say profitable, what I said was revenue. If you are building something, you will lose money. But if you are building something, it doesn’t have to just be like building users, it has to be building revenue at the same time. Whenever I tell the story of iROKO, it’s not the story of just us raising money, but it should be the story of how much revenue we are making. Now, in as much as I can’t disclose how much that is, if you are in the business of startups and you are not generating any revenue, then what are you? Because ultimately, a business is a business is a business, and a business survives on cash. If you are not making any cash or trying to make any cash, then you shouldn’t be in the business of doing businesses. At least as far as I’m concerned.
Now are you trying to make cash? Oh, you said you are making revenue already.
We have been. Between 2011 and 2012, we grew revenues like 400+ percent. When it comes to revenues, it’s something we just don’t play games with. I spend a significant amount of my time coaching the companies I work with to make revenue. Interesting thing actually, I wrote an article about what kind of companies SPARK will want to take on and revenue is essential. So, if you don’t understand your revenue model, if you don’t understand how you make money, and if we don’t believe you, we can’t put money in you. I don’t care if you have ten million users and no revenue, I’m not going to eat ten million users, it’s not going to fuel the gen, it’s not going to buy fancy cars, it’s not going to look after my children to be. It’s not going to do anything.
So, in 2010, iROKO started. How did that come about? What’s the real story?
In 2008, I was in Nigeria. I was in a club there and they were playing predominantly Nigerian music and I was quite surprised and I guess proud at the same time that with all the global music out there, they were playing Nigerian music and I thought, ‘hey, I wonder if people know about this in the UK.’ So, I basically bought about a hundred CDs of a variety of musicians and brought them back to the UK thinking I could just set up an online store selling Nigerian music CDs; that basically didn’t work. The first iteration of iROKO was an ecommerce store selling Nigerian music. It didn’t work for like six months but it was only a side project so it wasn’t something that was taking up too much of my time.
Then my mum asked about Nollywood movies because she used to watch them all the time. I went to a store to try and buy the movies and it was a bit of a nightmare. I’m a person who loves movies, predominantly Western ones at that point, and whenever I want to watch a movie, the first thing I do is go to IMDB, see what the latest movies are and get some basic information about them. For Nollywood movies, nothing like that existed. So, I thought, ‘how can a massive phenomenon have no one way you can find and discover movies and have no actual type of online presence?’ I thought that was ridiculous and unsustainable.
At the time, there was a lot of piracy on YouTube. Those days, YouTube’s clip restriction was about 10-15 minutes. People will take an hour movie, chop it into six parts and upload. I thought that obviously a huge community loves this stuff and there is no formal way of doing this; it just made no sense for me not to at least exploit that. So, I took it to Bastian and said we should look at doing this thing. I mentioned not having any money at the time. He said, ‘Shut up, let’s do it.’ He gave me £500 and we started looking at how to do that properly.
In the end, I had to jump on a plane and come to Lagos. Over a nine month period, I came to Lagos two different times and on the third occasion, I moved to Lagos. Then in December 2010, we launched Nollywood Love on YouTube, which is the first legal presence of Nigerian movies online ever. We were one of the first Africans to be part of YouTube’s partnership program which is quite wide spread now, but it was very rare then. I guess I was fortuitous that we were at the right place at the right time.
How many people before Bastian did you talk to about your idea?
I was never part of the Manchester or London Nigerian community so it was strange to people for me to start telling people that I was thinking about doing this Nollywood movie thing and that I was thinking of going back and forth to Nigeria. They thought it was a bit crazy and more importantly, I had failed consistently for five and a half years so there was no reason for them to believe me anymore.
I spoke to the friends that I had and they said, ‘Hey, good luck. We’re not giving the money but good luck.’ Again, luck does not do you anything. It’s good to have but if you don’t have cash as well then you’re fucked.
I’m just happy Bastian believed in me at the end of the day. I had pitched different ideas to the same people on so many occasions and it all had failed. Why will they have ever thought that this one would be the one to amount to anything? I spoke to some of my Nigerian friends, they just weren’t interested.
What was the relationship between you and Bastian?
We were roommates in school. We lived together over a couple of years while we were in the university. He left Manchester in 2006 while I graduated in 2005 but stayed on for another four years. We wouldn’t see each other but we would always talk on the phone. We were good friends and he was always interested in what I was doing.
He invested in one of my first business which he lost all his money on. I say invested because he was a student at the time and he invested his time and a few hundred pounds. When the iROKO thing came up, it started with £500 then I came back to him for more money and over the course of the year, I probably came back to him like fifty times and it was for small amounts. Then one day, it was over thirty thousand pounds and he told me, ‘Jason, you’re not getting any more money.’
Then we were seeing some progress on some fronts and in the end, he said if we are going to do this thing, we should do it properly. He liquidated his life savings and just said, ‘Jump in the plane, go and live in Nigeria and figure this thing out.’ Only your best friend will do that.
ON PAID EMPLOYMENT
It just sounds like you were a ‘kept man’ with someone taking care of you and in this case, it was Bastian. What were you bringing to the table, minus iROKO being your brain child?
So, I’m smart and I obviously have the personality. I could have gone out and easily gotten a good job.
Why didn’t you?
The thing is, I want to be rich and I was ready to brutalize myself for that. Some people say ‘get rich or die trying’, that was me. I was like I’m going to change the world, I’m going to make my dent in the universe, I’m going to make so much money and the only way for me to do that is to focus on big things which I thought will yield big returns.
A lot of people who go into entrepreneurship think ‘I’ll do this for six months and see what’s going on,’ I was just like ‘I’m doing this!’ So in that period of time, I took small jobs, but I never stayed for long. I actually made a commitment to myself. I would get so broke that I’d have no money, no food. I was homeless for nine months. I could have gone back home, but I decided that going back to my mom was not the way real men earned their straps. You stay where you are and make things happen.
For me, at any point in time I could have stopped and given up. But once I give up and I start getting a salary, to disconnect yourself from getting a salary is quite a difficult thing. I think salary is cancer to an entrepreneur
BUILDING THE TEAM
When iROKO first started out, it was just you and Bastian? You came back to Nigeria and started talking to distribution channels?
Bastian only joined the company early this year.
How did you convince him to do that?
A boatload of VC money and I said, ‘Look, we are trying to build one of the most valuable properties in Africa. We have a big head start; we are obviously winning’, and I said, ultimately, I needed him. I am a big vision, big sort of talking type guy and Bastian is more detailed oriented and tends to be more operations focused. He is the complete opposite of me so together we make an amazing team. I’m sure by myself, iROKO probably would have spun out of control. I kind of explained to him that it won’t end with iROKO; it would be more like what I’m doing with Spark and so many other things I am interested in doing.
Let’s go back to the first few days when iROKO started. Talking to people, making connections. Who helped you start off? Did you do everything yourself or was it contract staff you got to help?
For the first year, in most of 2010, I did it myself. Everything. I had like six screens, I was sitting in my cousin’s house in London. Eight hours a day, I’ll just stare at the screens; I spent obscene amounts of time just sitting there trying to figure things out. I think I was scarily ambitious.
In the beginning, it wasn’t contact staff; I pulled in people as I needed them. When we launched Nollywood Love, it was me and like six people working at my apartment in Festac. Over six months, it was me and 45 people. At the end of day it’s me and 100 people. We’ve grown and shrunk the business accordingly depending on the nature of the work we have to do.
And again, bringing online the digital assets of 15 years – and we are talking about text, visual, audio and video – bringing it all from all the different formats is not a lean, four guys in a room type of thing. It needs bodies to get that done.
Do you handpick all these people?
I’m a terrible interviewer. Literally it’s one interview and if I like you…there are two criteria for me. First: are you stupid? If you are stupid, then you can’t work with me. If you are not stupid then we give you a chance. So, if you are smart, if you can string some sentences together, I’m good. And second: do you want a job or do you want to come in and work for me? Can you believe in what I’m actually trying to do? Anyone who has interviewed with me knows that I’d have an interview and at the end of the interview, I’ll make you an offer. I’m just that kind of person; I don’t have the patience for that long ‘getting to know company culture’ and the rest of that stuff.
And co-founders, are they necessarily important?
It depends on the kind of business but I think usually co-founders are. You need someone to share in the pain. It’s horrible to start up. Running a business is not easy, you think it’s all kinds of glitz and glamor, most of it is just really boring stuff. You’d be horrified how much time I spend on admin
ON STARTING OUT
So you moved back to Nigeria and started this. What you did basically was bring Nigerian movies online with a partnership from YouTube and that was it?
Simplest thing. The issue with the partnership was actually a very difficult thing to get. I was trying to get it for three months and I just couldn’t so, again, in steps my angel Bastian and he said he knew someone who is the largest independent film distributor in Germany. We reached out to this guy and spoke to him, told him we were trying to contact someone from YouTube and asked if there was any way he could help us. He was kind enough to listen to me and hooked us up with someone from YouTube. Once I showed them the data of what people were actually doing on YouTube with the pirated stuff, they got really excited. So my original YouTube partnership, even though there was a Google in Nigeria and in the UK, was with Google in Germany. We got the contract on a Tuesday, by Sunday, I jumped in a plane and moved to Nigeria. It was like that was what we were waiting for.
What was the hard part in this? The technology?
The technology was easy. Getting the licenses was the most difficult.
How long did that take?
We launched with 200 movie licenses in December. It took me the best part of eight months just to figure the licensing piece out. We had to deal with the complexity of not trying to get fucked over. The whole iROKO business is basically built on a stack of legal notices and this is not the most respected thing in Nigeria. So we had to make sure that we could protect ourselves from that. It’s called a fuckability factor.
So, we were very aggressive. We were very content focused in a world where no one valued content. The biggest innovation we brought to Nigerian media space is that we value content more than anybody else. And when I say we value content, we pay for Nollywood content more than anybody. We pay more than DSTV for content because we value it. We have almost forced them to increase their content cost by hundreds of percentile just to catch up with us. Our biggest fear is DSTV because ultimately, they have eight channels dedicated to Nollywood type content.
I would think that your target audience are not in Nigeria
Today. There is a tomorrow, and tomorrow usually looks a lot like today. There was a DVD market in the US, we just destroyed that basically. Seventy percent of their market just disappeared in like a year. Do you honestly think if we had like 5,000 free movies online and you had a fast internet connection, you’d go out and…
But that would take us a while, getting the fast internet connection.
Absolutely. But the strangest thing about progress is that it always seems slow until its not. Ten years ago, no one had a mobile phone. Now, everyone’s got a mobile phone or two. I think, lets see how the next 3 – 5 years looks like. And the interesting thing is that iROKOtv is what, 17 months old? It’s a very young business. Let’s see what it looks like in like 5 years’ time.
And you are going to stay strictly online? You’re not going to try and compete with DSTV directly in their space?
Last year, I actually looked at how we could get into TV. I’m a big fan of TV. We looked at acquiring a TV channel in the US and in the UK, we even spoke to StarTimes at the. In the end, we looked at the space and we thought they’d have to come and beat us where we are. With TV, it’s more difficult; there are lots of gate keepers and I don’t like gate keepers. So, our concern today is not DSTV or trying to compete with DSTV. Our concern is to make sure that we are so awesome that they will have to somehow find a way to deal with us.
I think Netflix CEO, Reed Hastings, said recently that HBO will end up having to look like Netflix because they have to go online, they have to mobile, they have to do these things. So he wants to look more like HBO in terms of his content deals and his strategy before HBO ends up looking more like Netflix. In the end, do you honestly believe in ten years’ time that people will be using mobiles and internet to watch TV programming? Of course they will. Will we need to go back and be on TV or will we need to be on every device? I think as long as it many seem, things move much more faster than we usually think.
ON FUNDING
When did you start having other people minus Bastian investing in you?
So, Bastian put his money in. It wasn’t enough. Then we met with the Tiger Global guys and the first raise was $3 million, then $5 million. We announced $8 million as a big number because we did not want people to know yet that we had raised the money. By the time we announced it, it was game over already.
How did Tiger Global get to hear about you?
They read about us from Sarah Lacy on TechCrunch. When she came, we had grown beyond my apartment, we had about forty people, we were doing fifty thousand dollars a month in revenue so we were actually profitable when she came.
So why did you need funding?
The difference between a business that does $1 million in revenue and a business that can quickly grow to doing tens of millions of dollars in revenue usually is funding. So, to open up our global office base is not an easy thing. To hire the sort of people we need is very difficult. I think you’ll be hard pressed to find any actual big consumer internet companies that haven’t taken funding.
You spoke about having revenue models, what’s yours?
Too much money, that’s our revenue model. As much money from where ever we can. We have revenue from our advertising business, both display and video. We have direct relationships with different advertisers, locally and globally. At the moment,I have an ad sales team in Johannesburg, Lagos, New York and London where we are just trying to make money from advertising. We have a subscription business based out of New York. We launched iROKOtv PLUS in July 2012 and, to get access to brand new movies, you basically pay $5 a month.
LET’S TALK SPARK
So you took VC money, started your company, made money and now you are putting money into other companies
It’s the circle of life. But they are very separate things, there is no iRoko money in SPARK. SPARK is a completely different thing.
Whose money is in SPARK?
My money, Bastian’s money, my wife’s money and we have a private individual who is interested in giving us some money as well.
How do you find these people interested in giving you money? Or do they find you?
Rich people like to do business with rich people. I learned that the hard way. That is the reason why the world is what it is. Social mobility is dead. Three years ago, if I wanted to raise $1000, I would struggle. Now, I can make a few phone calls and raise a million dollars just because it’s me. I think what has changed: Ten failures, One success.
Let’s go back to SPARK
SPARK is my pension.
You know, I was thinking, it wasn’t like you started iROKO cos you absolutely loved Nollywood movies. Fine, you loved movies but the driving force, to me, was the need to make money.
No, it’s not need. I don’t even like money. The strange thing about me is that I have no interest in how to spend money. I’m sure if you look around, I wear the same things over and over again. I have no care for fashion, I have a thing for Range Rover cars but beyond that, I genuinely don’t care about most things. I care about building. There is just something beautiful about building things. So, I work every single day, I read reports, I look at stock charts. I’m just interested in the business of business. iROKO was an interesting business opportunity I thought I could exploit, and I guess SPARK is like a similar big gamble.
It’s not much of a gamble
A million dollars put down into about twenty unsubstantiated teams is a big gamble. If it wasn’t, why is everyone not doing it?
These COMPANIES you brought together, they are different people who own all of them?
I have been sort of half advising. I’m very active online, I advise people all the time.Whether you want my advice or not, I will give it to you. So, these are guys I felt had the potential to be the next generation of like internet beasts. Interesting ideas, interesting teams; they just needed a little bit of mentorship and some money. And I think that’s pretty much what we bring to the table.
So each company is owned by different people?
Somethings we have created ourselves because we thought it was an interesting space so we kind of built a small team for that. A lot of the bigger businesses we are putting more money into are businesses that existed before. Take hotels.ng for example, he was there for a year and we thought he needed to move faster with somethings and we could help him.
The idea was really simple, it was just like: you didn’t have the idea quite right, but I like your hustle. I think with the idea quite right and just some strategic advice on a non-frequent basis, you could build something pretty awesome. That’s pretty much it – strategically helping them get a framework for their ideas and just make sure they are well funded.
And its only technology companies you are taking on?
Yeah
Why do they have names like that? Why is it Drinks or Bus or To Let? Why not some brand name like Kuluya?
When you see Insured, what do you think it is? If you are going to build a brand, the most important thing is that people get you. A lot of startups have some pretty stupid names. I think you should try where possible to improve your chances of success and sometimes the name looks after that.
I think iROKO Partners is a shit name. I was telling Bastian I want to rebrand it to just iROKO. iROKO Partners with what? It sounds like a private equity firm or something. I think simple things like stupid names have a massive impact. If you call up like Nigerian Breweries and say I’m from Drinks.ng, understandable. If you go to pitch your hotel to get some direct relationship and you say you are from Hotels.ng, understandale. If you talk to insurance companies and you say you’re calling from Insured.ng, you get it. if you call yourself a christian dating community then Christians.ng…
Its still vague. It sounds like a group of Christians coming together
But what is it? The whole point of the dating site is: you want like minded Christian individuals to come together. You don’t want strippers and prostitutes on there.
So, as opposed to me thinking it was you guys being lazy, its really you keeping it simple?
Brutally simple.
The whole point of SPARK is to give other businesses a structure?
No, just to give it cash. We write checks; our edge is access to funding.
IN RETROSPECT
What would you tell your 2005 self?
I would have told my younger self, go straight to the internet. Don’t waste your time on anything else. I have no interest in anything else other than internet or technology. Not banking, not oil. I would be a terrible banker and a terrible oil executive. Internet is the thing. Go to the internet!
