Addis Alemayehou Chairman, Kazana Group
Born in Addis Ababa, Addis Alemayehou started education at St. Joseph School and would set off for Kenya at the early age of eight. After 10 years in the neighborly nation, the US and Canada became the destination for his tertiary education. Fourteen years later, Addis returned home in 2001 to assess starting a business. He has never looked back since nor has he ever considered living abroad again.
Addis’s first venture was Afro FM—the first English FM radio station in Ethiopia, now fully acquired by Walta Media and Communication Corporate, a state and party affiliated media operator. Thereafter, the marketing and advertising company 251 Communications was launched and is credited to have contributed to the currently flourishing advertisement industry while serving large clients like Emirates Airlines, VISA, Coca-Cola, Heineken, and the World Bank.
Addis recently founded Kazana Group as a holding company that would also invest in startups. A Founding Member of Kana TV, a Board Member of Dangote Ethiopia, and a Senior Advisor to the Albright Stonebridge Group are other features of his curriculum vitae. He has also been highly engaged in helping small and medium enterprises (SMEs) export their products to the United States under the American Growth and Opportunity Act (AGOA). In this interview, Addis sat down with EBR’s Addisu Deresse to converse on family, entrepreneur matters, and much more in between.
You are a family man. Tell us about that side of you.
Yes, I am a family man. I have two children, a son and daughter. I hope I am a good father; I spend time with them and take seriously my responsibility of taking them to and from school. I believe in the quality, rather than quantity, of time a father spends with his children. I also have date nights with my children, separately. Because the kind of conversations you have with your daughter is different from those with your son. I value those alone times the most and is something I learned from my father.
When we were in Dire Dawa as a little kid, my father used to take me out on a walk every day—we would walk all the way to Kulebi Gabriel and back. I have never forgotten those conversations that we had in those times. In the same way, I use these alone get-away times with my children to talk to them about business, music, and everything in between. So, I hope I am a good father.
What or who influenced you as a businessman?
I would say, my grandmother—the woman who was able to build a business worth probably in the billions of birr during the Imperial regime. I grew up with her and would sit by her side every night and she would give me her income of that day and how she made it. She used to own a tejbeit, [a local honey wine shop]. Those conversations have lived with me as ice breakers that would later open my eye to understanding money flow and everything else.
Just looking at the little infrastructure being built in Bole, she bought a property there. Everybody thought that she was insane but look what the place looks like now. Had she still owned it, she could have sold it for hundreds of millions. Her imagination amazes me to this day.
What was in your mind when you returned to Ethiopia two decades ago?
Actually, I always knew I would come back. I remember writing in my high school graduation book something along the lines of wanting to grow in my own country. But what was enlightening, however, was that repetitive question: where are you from? Of course, whether in the US or Canada, people genuinely ask this because they really want to know where you are from. But for me, it served as a constant reminder that I actually did not belong there. Every time I heard the question, I would tell myself that this is another way of them telling me that I am not from around here. So, those moments somehow built-up to a decision of me wanting to come back home. But, as a general understanding, I always knew I wanted to return.
Tell me about the biggest challenges in your entrepreneurial journey since your return?
[I had to build my networks from scratch]. Yes, I was born and raised here; I am from here and speak the language. But, building a network similar to those who spent their young years here was a big challenge. Of course, I have contacts with my St. Joseph friends but it is not developed enough into a network that could help in business. They say, your network is your networth. I was not able to build that network, so I did not have the networth.
How do you see the banning of Ethiopia from AGOA? As someone who has been helping SMEs in Ethiopia export under AGOA, what are your thoughts of the US decision?
This was one of the most stupid decisions on the part of the US government because the decision never impacted the body it was intended for. It impacted the poor workers whose lives depended on those jobs. On another side, it is a big opportunity. In fact, for any African leader who wants to use these moments of awakening to face challenges and change things for the better, there is no greater opportunity than being banned from AGOA and the Russia-Ukraine war. It is about time to ask the right questions about why we are not able to feed ourselves. Why can we not tap into our potential that is much talked about? What can we actually do to tap into those potentials? So, yes, it is a challenge, but it is also the right time for a change.
In terms of my previous AGOA work, my job was strictly market linkage. I brought US buyers here to meet with local producers and also took our local producers to the US to take part in trade shows to link with US buyers.
You founded Afro FM. What is your involvement with the station now?
None. I am out now.
Was the radio station performing up to your expectations in the latter years of your ownership?
Absolutely, not! Imagine you are a foreigner living in Addis around 15 years ago, way before the internet was this impactful. You would have no means to hear if there was an emergency notice from the government to leave the city. You would have no means to hear about business and investment opportunities nor of new regulations. That was why I established the radio station.
Now, it is way off those intentions. But as a business, it is not only and always about profit. Some businesses are about their impact on the community and I still meet people who reminisce listening to Afro FM in their school days and share with me their good stories. So, that is something to live by.
Kana TV station was accused of wasting citizens’ working hours. What is your take on that?
There is no bad PR; any PR is good. Whichever way they do it, it is always good that people are talking about your business. I remember when it was the talk of the town, even Parliament was discussing it. We considered it as an advertisement without payment.
As far as the accusation went, I think it is unfounded. We launched the station at a time when city dwellers owned satellite dishes with nothing to watch except things in English. Imagine yourself coming home from work all tired and having a channel where you can watch fresh content in your local language. That is what we did. It is not like we imposed anything on the people.
The remote control is in your hands. I don’t have Kana TV in my home. That is my preference. [We launched the TV station, because there is a market for it]. As long as you are watching it though, it means you like it and the channel has succeeded.
You started Kazana Group as a holding company. What does it do?
If I own a business as a majority investor, I take full responsibility for the business: both for its success and failure. But if I invest in a startup as a minority shareholder, I can advise them without taking full responsibility. That is how it all started. Then, these startups became two, three, and kept on growing. So, we thought of collecting them in a holding company. We now have a company that holds shares in numerous startups.
What role do holding companies play in the success of investments?
It is the right thing to do. Let us consider what the Ethiopian government is doing now by establishing Ethiopian Investment Holdings. Of course, they are doing it with large resources and potential, but it is a good example. There are so many state companies under the holding company and so you don’t have to waste resources by filling positions for each business when one at the holding company will do. That is not all. One company could be great in IT but bad in human resources; while another the contrary. Imagine bringing these two companies under the same holding company with one big ideal team that works for both companies.
Holding companies could also create a platform for the public to invest in those firms and not just use their services or products. Someone who has ETB100,000 in the bank may decide to invest in these companies rather than saving his money at a 7Pct interest rate. So, I think the Ethiopian government has done the right thing in establishing the holding company and collecting its state companies under one umbrella. So yes, holding companies could encourage private participation.
Do you expect a drastic change in revenue of the mainstream media in Ethiopia in the era of digital marketing and advertisement?
The death of mainstream media—newspapers, radio, TV—as we know it, is assured. It is coming about slowly. About 15 years ago, I remember patiently waiting for the Saturday paper to read the latest business and political developments. Now, more than 70Pct of my news comes from the internet. Even those being reported on have already been talked about over the internet. Digital marketing will take over ads on newspapers, radio, and TV. The progress is also encouraged by the latest developments in the telecom sector. The entrance of a new telecom company would only mean that internet services will expand faster and the assured death will only come sooner. The good news is that you can learn and catch up without having to put in much effort. You have to take it as an opportunity.
What is guerilla marketing regarding start-ups?
For startups, getting noticed is the main challenge and you may have heard me teaching about it. As a startup, you may not have the budget to advertise your product on mass media. So, you can go door-to-door telling people about your business—that is what we call guerilla marketing. If you open a restaurant in the neighborhood, for example, you can go around that area and distribute your menu. So, that is what I suggest startups to do as getting noticed is the most essential thing when businesses start.
What should a business in Ethiopia do in order to find African partnerships the way you have?
Perhaps a decade or so ago, you would go to the Nigerian embassy and ask about what business opportunities there are in Nigeria. And when something comes up that strikes your interest, you would just leave your number and tell them to connect you to that investor in Nigeria so that you can team up over some project. Now, everything is easy. I just go over my social media feed and see if there is something that gets my attention. I would then just DM [direct message] them my interest to learn more about them. Without exaggeration, I would find five-six emails every day from businesses in other African countries wanting to learn more about my business, about Ethiopia. Social media is the most powerful tool to get those partnerships.
How do you evaluate the impact of those partnerships and collaborations beyond borders?
I would not have been here otherwise. If you are able to work with other Africans, Ethiopia is like watching a movie again: what we are about to live, other African countries have lived it already. We don’t have to make the same mistakes, trapped in the same pitfalls. We can just develop the right model, remodel it in our context and use it. Those partnerships, with no doubt, have been helpful in many areas.
What is your take on the unfair competition in the marketing and ad agency industry over human resources and customers?
It would be foolish to think that your staff and customers will live with you forever. My staff are like my children but I know even my children are going to leave me one day. The main thing is that you must always be aware of that fact and be prepared in advance.
We have a permanent internship program so there’s always a group of young graduates who get training and are prepared to take over a job, as there are always a group of employees who leave. If you think about it, an employee leaving your company for another is good PR for you. I have employees who have left for Safaricom and other big companies. I know how those companies will think of us because of those employees. Also, it is inevitable that employees want to grow. Whatever you do to keep them, in terms of salary or promotion, can never be enough to satisfy one’s imagination. All you can do is be ready all the time.
What goes into creating great advertising that catches the consumer?
Telling a story the way the consumer likes it. This is not a job where we do what the creator or owner wants to hear. For each advertisement we create, we spend one day with the target audience. You know there is this word widely used among Addis Ababan youth, jealous, which is used among the youth to mean a friend even though it means otherwise in English. It might also sound offensive to the owner or creator. But, if the Addis Ababa youth is the target consumer, we would definitely be using that word. The key thing is understanding the target consumer group to the fullest and telling a story. We sell stories; we don’t sell products. The company is the one that sells the product. We create and tell a story the way the consumer would tell it to their peers.
What do you see when you look into the future?
I feel more hopeful than I ever have. Even my two children feel what is coming is more of a positive thing. My son got accepted for a scholarship in the US and he refused to go. He said there will be more opportunities here than in the US as there is only competition there.
I was sitting at this hotel a couple of days ago full of white people, different from those we had about 15 years ago which were from NGOs. These were entrepreneurs and I even called my friends and shared with them what I felt about that scene. We have sold the first license in the telecom sector; we are about to launch the first stock exchange. Imagine the number of jobs that will be created around these two major shifts in our economy. Imagine the number of jobs that are being created just because we are transacting faster than before. You know, I receive CVs from diaspora members who want to come here. We also have many others who are already here. In every angle, I only see hope. EBR
10th Year •June 2022 • No. 108