Smart People Also Make Mistakes: Kirubi’s TV Investment that Went Wrong

Business magnate Chris Kirubi’s well-oiled money machine continues to roll through creeks, valleys and hills raking in millions by the day. Beyond his inspirational tweets, the former Centum Investments chairman is a shrewd businessman with a nose for business ideas brimming with potential but he never says it; you just have to look closer to be familiar with his entrepreneurial nous.

At 78, Kirubi’s money has grown taller than he would have imagined. In 2012, Forbes ranked him as the 31^st wealthiest man in Africa with an estimated worth of Ksh29 billion, his wealth has grown exponentially since then.

Recently, the maverick businessman raked in a cool Ksh714 million from the sale of the Bic franchise back to its previous owner, French conglomerate Société BIC. It is almost as if money shadows him wherever he goes.

While the money keeps trickling in, Kirubi has a close attention to detail and has the ability to spot an unviable business opportunity from a mile away, which would explain why he is so successful.

On March 10, 2016 while Kirubi was still group chairman, Centum Foundation held a meeting at a Nairobi hotel with six startups that it was investing in. DJ CK as he calls himself was meeting the proprietors of the small businesses for the very first time.

The businesses include Errand Services, a company which runs errands on behalf of it’s clients, Alive and Young Naturals, a bathing soap manufacturer, Bunifu Antivirus, Desserts Anyone Limited, a chocolate manufacturer, Blissful.Co.Ke, an online platform which connects suppliers to prospective clients and Elimu TV, a television station that provides secondary school education.

The meeting was deemed so important that former ICT Principal Secretary Victor Kyallo was in attendance alongside a number of deep pocketed individuals.

Centum CEO James Mworia and then Centum Foundation Operations Manager Valentine Njoroge were also in hand to take their boss through the ideas they had deemed worthy of investment.

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So Kirubi went around the stands that the different start ups had erected. He was happy with all the ideas that Mworia had invested in except one.

When it was Elimu TV’s time to present their idea, Kirubi listened closely but surprise was written all over his face. He was clearly bothered by the fact that Ksh10.2 million of his money had been pumped into the idea.

After Elimu TV Director Jane Ngima was done with her pitch, Kirubi turned to Mworia and asked him: “James, how did you reach this decision? This idea is very noble but I don’t see how it will make money”

Kirubi’s comments demoralised Ms Ngima who did not see them coming.

Kirubi hunch

Elimu TV runs a normal curriculum like any other secondary school; the only difference is that it broadcasts it on TV and uploads videos of its lessons on You Tube.

Ms Njoroge, in her capacity as operations manager, was responsible for headhunting promising prospects.

Months later, she started receiving anonymous e-mails from Elimu TV teachers, who claimed that they were not being paid.

One morning, Ms Njoroge made an impromptu visit to Elimu TV studios on Thika Road next to Garden City Mall to inspect the claims and the health of the organisation Centum had invested in.

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It is fair to say she was disappointed with what she saw. She learnt that the money had been misappropriated and none of it went into making the idea grow. On top of that, the business never attracted enough advertisers to make it a sustainable business.

From that day, Elimu TV was placed ‘under administration.’ They would not do anything without consulting Centum.

The company was later hit by a staff exodus as most teachers opted to leave.

Currently, the business is still running with new staff under the same model. It remains to be seen for how long.

Perhaps, Kirubi, a media owner himself, was worried that the digital disruption rendered the Elimu TV business model unviable. He must have wondered whether the fledgling station would be able to compete with mainstream media despite the investment.

The whole debacle, however, proved that Kirubi was right from the start.