Dancing to a different tune

Startup of the week: Mdundo, a mobile music service for Kenya

Elliot Bentley
mdundo

Emerging markets often require a novel approach, as demonstrated by Mdundo’s strategy of selling MP3s via physical scratchcards.

Each week, we’ll be featuring the most exciting and
innovative startups around the world. To nominate startups to be
featured on the site, email elliotb@sandsmedia.com (or if
you’re a Java-related startup based near Santa Clara and want to be
involved in JAXconf 2013, email
chrism@sandsmedia.com).

As Africa’s infrastructure improves, there’s an increasing market
ripe for the plucking by local tech startups. One hot property is
mobile music service Mdundo, a
collaboration between two Europeans and two Kenyans. We spoke to
co-founder Martin Nielson about the company’s
business model and the challenges faced in this emerging
market.

What’s your elevator pitch?

Mdundo is a music distribution platform that aims to give consumers
access to African music by providing a mobile web music platform,
where music can be downloaded legal, easy and fairly priced.

We’ve tailored our product to the market by enabling locally
popular payment methods and delivering local content, which does
not appear on international music platforms.

A key element in our model is scratch cards (similar to lottery
tickets with a pin code hidden under the foil), with the pin code a
user can download songs from our platform. Scratch cards are
already widely used for buying airtime in Kenya and broader Africa.
Mdundo distributes the cards though Kenya’s artists. The cards are
sponsored by AIRTEL which covers the production cost in return for
advertisement on the cards, and they are distributed free of charge
to the artists who sells them.

Mdundo then upsell music to the same users and sell scratch cards
for promotional usage to other brands and split that revenue with
the artists on our platform.

When was the company founded and where are you
based?

Mdundo is a company founded by the African seed investment fund
88mph. Key investors in the fund
started testing the idea of selling music on scratch cards in
August 2012, and decided to make an investment into the startup in
September 2012. From that point a team was established around the
startup, which moved into 88mph’s incubator offices in Nairobi,
Kenya.

How many staff, and what do they do?

The Mdundo team is currently four full time employees.

  • Gustav is the CEO, he has been a part of the team
    since November 2012. He focuses on business development, finding
    customers and creating potential revenue streams. Gustav is from
    Sweden.
  • Martin was previously working as an intern at 88mph,
    and he has been a part of Mdundo since August 2012. Martin’s task
    is to “make the shit work” and he spent his time searching for a
    perfect product­-market fit. Martin is Danish.
  • Eugene started working as an intern for Mdundo in
    October 2012, he is taking care of aggregating the content and
    updating the content on the site.
  • Catherine, the last member of Mdundo, is responsible
    for marketing and interaction with customers. She has been a part
    of Mdundo since November 2012. Eugene and Catherine are both
    Kenyans.

You might be wondering how these four people can run a tech startup
without any techies. Mdundo is founded by 88mph and as a part of
this Mdundo are using 88mph’s CTO to build and update the
platform.

What technical difficulties did you overcome to get to
market?

Usability – a smartphone can handle several tasks at the same time,
which is not the case for a basic feature phone.

Another technical issue is the stability of the Internet
connection. This is an issue which is a bit hard to do anything
about, but we have had a number of lost connection during
downloads.

What difficulties have you found scaling up (people and
tech)?

The model is based around printing and distributing “scratch cards”
for each and every artist on the platform. We are depending on the
cards to attract users to the platform. The printing process of the
cards has proven to be a bit difficult, and companies who
specialize in printing the cards needs a fairly high quantity for
it to be profitable and the delivery time has been a lot longer
than we expected.

What are the company’s plans for the future?

Currently we operate in Kenya only, but during the following weeks
we are planning to sign up artists from the rest of East Africa.
Since the model is web based and the distribution is focused around
the artists it is fairly easy and simple for us to expand into new
markets.

We are also looking into other usages of the scratch cards such as
tickets with music on for events and promotion for cooperates. We
are working with Samsung in Kenya who are buying music cards from
us to distribute together with their phones as a value add for the
customer.

What are your three top tips for wannabe
entrepreneurs?

  • Focus on revenue.
  • Test your assumptions as fast as possible.
  • Look for partners who are as hooked on your idea as
    you are.
Author
Comments
comments powered by Disqus