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Twiga CEO Njonjo talks about resilience in entrepenuership

The entrepreneurial journey is often unpredictable, filled with unexpected challenges that test the mettle of even the most seasoned leaders. In line with this, Peter Njonjo, the CEO of Twiga, recently shared a compelling narrative of the company’s trials and triumphs, illustrating a remarkable journey of resilience and strategic adaptation.

Njonjo’s reflections on the past weeks resonate with the inherent uncertainties of entrepreneurship. Choosing the path of entrepreneurship is akin to navigating uncharted waters, with each decision influencing the company’s trajectory. Njonjo started with a milestone for Twiga – “Last week marked a significant milestone for Twiga as I signed over 100 letters to suppliers, signalling the completion of a rigorous restructuring and refinancing process that paved the way for settling long-standing dues,” Njonjo wrote. 

To understand Twiga’s recent challenges, Njonjo rewinds the clock to 2019 when he finds himself contemplating the jump into full-time entrepreneurship when the markets were flush with liquidity, and start-ups were being valued on revenue multiples rather than traditional EBITDA multiples. Recognizing the need to secure funding for Twiga, Njonjo embarked on a journey that would define the company’s trajectory for the next few years.

The decision to raise significant capital proved instrumental, enabling Twiga to fund rapid growth. “By early 2022, a mere three years later, Twiga found itself among the top 10 revenue-generating companies on the Nairobi Stock Exchange. The success was tangible, and plans were in motion for a Series D funding round, poised to catapult Twiga into a position of market dominance,” Njonjo wrote. 

However, the world of entrepreneurship always has its curveballs. In March 2022, the US Federal Reserve’s decision to increase interest rates sent shockwaves through global markets. Initially, Twiga planned to soldier on, but the subsequent revelation of rising inflation in the US and the commitment to control it created an unforeseen challenge. Investment funds crucial to Twiga’s Series D capital raise began to retreat, signalling a paradigm shift for start-ups in emerging markets.

“Imagine being the pilot of a rocket ship about to break into frictionless orbit, only to discover that the fueling station has run dry,” Njonjo encapsulated this analogy to point to the challenge Twiga faced at 40,000 feet above sea level. Panic set in within the ranks of management and shareholders as they grappled with the new reality of a restructuring journey beginning due to significantly fewer resources than Twiga was accustomed to.

Amidst the restructuring efforts, Twiga found itself under the intense scrutiny of critics on social media and mainstream outlets. The start-up darling was now being painted as a rogue player that needed to be reined in. “The urgency to wean the business off external funding and transition to internal cash generation became paramount,” Njonjo highlighted as he faced the challenges amid a dwindling till and mounting pressure. 

In times of turmoil, Njonjo points out certain inevitabilities that can surface within a company:

  1. There is a growing asymmetry of understanding between management, the board, and employees.
  2. Rapid erosion of credibility with external stakeholders.
  3. Loss of strategic clarity as panic permeates the organization.

Recognizing the need for a strategic time-out, Njonjo highlights key lessons that proved instrumental in Twiga’s resurgence. Alignment with key shareholders, co-creating an externally validated strategic plan, making bold decisions, and transparently communicating with all stakeholders emerged as pillars of their recovery.

Twiga’s recent detailed retail census in Nairobi revealed an overwhelming interest from 94% of informal retailers to collaborate, showcasing the resilience and relevance of the company’s mission. Reflecting on this journey, Njonjo draws inspiration from the movie “300,” where resilience is compared to fighting under the shade provided by the arrows of adversity. He extends gratitude to lead shareholders, lenders, and the management team for their pivotal roles in Twiga’s journey.

In closing, Njonjo expresses the hope that Twiga’s story serves as a source of inspiration for entrepreneurs worldwide facing tough odds. The tale of resilience underlines the importance of adaptability, strategic decision-making, and transparent communication in the ever-evolving entrepreneurial landscape.

Note: This article is repurposed from Peter Njonjo’s Medium blog here

 

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