VENTURES AFRICA – Following the shock resignation of Mxit CEO Alan Knott-Craig Junior on Thursday, it appears that his limited focus on providing shareholders with financial returns may have played an important role in his sudden departure.
Knott-Craig Junior joined Johannesburg-based broadband internet provider iBurst in 2006. Heading up the company as managing director, by the beginning of 2008 iBurst had experience a spike in its subscriber base, with registered users hitting 60,000, up from 35,000 in the little over a year following Knott-Craig’s appointment. It was at iBurst that Knott-Craig developed an ambitious vision for his work endeavours, telling the Financial Times that: “My life there was all about faster and richer.”
However, following personal problems towards the end of his three-year stint at iBurst, Knott-Craig decided to move his family to Stellenbosch in 2009. Explaining the move, Knott-Craig divulges his important realisation: “I let work get in the way of more important things, like family.” Little did he know that by realigning his priorities and moving to the quieter city of Stellenbosch, he was in fact taking the first step in the adventure that would be Knott-Craig’s purchase of Mxit.
Knott-Craig acquired Mxit from its original founder Herman Heunis at the end of 2011. Having suffered severe injuries in 2007, Heunis made a full recovery but felt “tired”; prompting his decision to find a new owner for his booming social media platform. Knott-Craig heard of the opportunity and made the purchase of 90 per cent of shares in the company, through his investment company World of Avatar. Speaking on his excitement as to the acquisition, Knott-Craig said: “The purchase of MXit gives us the biggest social network in Africa. It provides a great platform to roll out a variety of mobile social media services.”
Throughout his leadership of Mxit as CEO, Knott-Craig insisted upon the privacy of Mxit users, refusing to allow advertisers access to Mxit users’ data. Talking to Memeburn in an interview in 2011, Knott-Craig explained: “We have to keep that community trusted, it can never be the case of Facebook where your information is available to advertisers, this is why I am heading there personally to run the show. Herman has done a good job of keeping the community guarded, the data is not sold and that is key and we need to keep that.”
While Knott-Craig’s sentiment is admirable – and should be followed by all social media sites – it is likely that shareholders were more interested in revenue than in users’ privacy; growth figures not exactly being Knott-Craig’s point of focus. Arthur Goldstuck says of the ex-CEO: “He often commented that it was more important to have fun, and that he did not pay much attention to the numbers”.
In his leaving statement, Knott-Craig accepted that his primary focus was not in line with the expectations of shareholders, announcing that: “While the shareholders and I share the same vision, we differ on how to get there.”
It would seem that Knott-Craig’s vision, with little concern for growing revenue played an intrinsic role in his departure from Mxit. With shareholders recently having pumped 100 million rand ($11.6 million) into the company, they will want to see financial returns and clearly thought that Knott-Craig was not the man to deliver such returns.
While it is unclear what Knott-Craig’s next move will be – having also stepped down from his role at World of Avatar – what is certain is that he will retain an emotional interest in the role of social media in developing society and the economy in Africa, demonstrated by the fact that he recently published his co-authored book on the subject entitled Mobinomics.