Tell us a bit about your startup?
Mdundo is an African music distribution platform that helps artists distribute and monetize their music. Based in Nairobi, we started working with ten Kenyan artists to search for a business model that would fit this market, one of them (Frasha from P-Unit) being a co-founder of Mdundo. We looked at the gaps in the music distribution market and we discovered that there are very little transparency and trust in the market and that the ability to browse for new music is very limited under the current services.
At the time we started the main way people access music on their phone legally was by sending a short code to a secure number and receive the song in an. That limits your chances to browse and find the music you like, and it also means that the artist is dependent on Telecom, who then takes a majority of the revenues.
Our solution is to build an online platform focusing on all mobile phones not necessarily those that are android based (access to the Google store). So anyone with a phone with Internet can get access to the service – almost all phones retailing above just three thousand shillings. The services is accessible to all phones it doesn’t matter what network you are using, what country you are in, what phone you use, as long it has internet connection. We don’t have to share the returns with telecomm companies to access the distribution network.
So how does it work? Users buy a scratch cards, load them to their phone and they are able to access the service?
We actually changed the service slightly. We started out as a scratch card service. We started by distributing scratch cards to artists, who would then distribute them themselves. We stepped away from that model about three months ago and went into a different type of partnership. Now you can download all the music you want free of charge from our website, and we sell adverting space to corporate companies which we pay a share of out as royalties.
So when did you start?
We started in September last year and launched the product in December. We launched our new model in the end of March, which is the business model we currently believe in.
What was your experience working with the accelerator 88MPH?
Our experience working with them was very good. It is important to note that compared to other companies 88mph invest in the majority of Mdundo is owned by 88mph. The idea of Mdundo came from 88mph employees, where I was working as an intern myself. From day 1 Mdundo has been an 88MPH company, rather than an individual startup. Anyway, our experience has been great; we are working close with people from 88MPH on a weekly basis. One thing to take away from the program is mentorship and contact with successful entrepreneurs, people who have succeeded before. When you are starting something new you tend to look at things with a narrow view as opposed to a broad view. By having successful entrepreneurs around, they are always reminding you of what is happening out there, and give you advice of what you should be worried about and what worries you should just forge
You were the first group to go through their accelerator program?
No, we were in the second group. Fall 2012.
You mentioned you have three co-founders, who are they?
Mdundo is co-founded by Gustav, who is currently the CEO, and Frasha from P-Unit, who is not around to run the day to day operations but is a stake holder. Then our majority co-founder is 88MPH.
What is your background?
I have a business degree. Before this I was working with incubating and motivating students to start up businesses. I’ve lived in Uganda and the UK working with entrepreneurship but from an NGO perspective.
How did you come up with the idea?
I actually didn’t come up with the idea. It’s 88MPH’s idea, which is why they are co-founders. Gustav and I are employees and co-founders. Gustav is the CEO. I am the COO. The idea is 88MPH’s together with Frasha. As far as I know they came up with the idea after talking to Frasha about the Kenyan music market. They were actually working on a TV show with Frasha more than a year ago. They did a pilot, and got to know people in the music industry. The musicians were not happy and the customers were having a really bad experience with the current music distribution services. They decided to come up with a service that is more favorable, and offers better pay, which now is Mdundo.
Do you have competitors around Africa that are doing something similar to what you are doing?
Yes, we are facing competition from different types of services. Many business are currently interested in the music industry in Africa but no one is doing exactly what we are doing. Most music is downloaded through illegal websites so our major aim right now is to reach out for people who are currently using these sites.
In regards to legal services, I have seen a couple of sites where you can actually buy the music as pay-per-song. I think the most similar site right now is Waabeh, but I haven’t seen them being very aggressive in the market.
There are a couple of bigger sites in West Africa and South Africa and I also know a couple of international services that are looking to find a way in to Africa. Deezer, Spinlet, Rdio and Iroko are some of the service I am currently looking out for. We are different from most of them because our product is not an app which means our service will work on whatever phone you have, even if it’s not a smart phone, as long as it can access the Internet.
What is your main focus in terms of market, Kenya, Africa, World?
Mdundo is an African company. Kenya is currently our primary market, but we are hoping to expand to other African markets as we grow. There is nothing technical stopping us from distributing our music in the whole of Africa and as we feel ready we will expand to other African markets.
When you were talking about competition I didn’t hear you mention services like Youtube, aren’t you facing any competition from Youtube and similar services?
Yes, I think they are. A lot of people download their music from Youtube because it’s the easiest way to access the music, not because it’s any easy. Youtube is mainly a video distribution service, while our service is mainly audio service. Youtube is a good way to get word out and our artists are starting to add a link to Mdundo below their videos. Thereby fans can get the audio from Mdundo hence spending a lot less time on Youtube. So of course there is competition, but I think it’s so distant, so it’s more of a question about awareness.
When you talk about awareness, how are you conducting your marketing activities?
As I said earlier, we have been two partners, the artists and us. Every artist is responsible of market themselves and our service trying to become a tool that makes it easy for artists to push out their music. Our main focus in terms of marketing is to give the artists something useful to reach their fans. Mdundo spent more time partnering with the media and corporates which we share interests with. We also send out lists of most popular songs to radio stations and different media channels, for instance Ghafla posts our top ten every week.
What about social media?
Social media mainly works as referral service and we are using it actively in our marketing strategy. Twitter works really well and we have had trending news on twitter a couple of times in Kenya the past month.
And what are your major milestones as of now?
We have several: We launched Africa’s first ever legal free music service, and since our launch three months ago we have reached 80000+ downloads, 25000+ Kenyan users & 350+ artists. Mdundo has been featured on BBC, Citizen TV, Classic105, The Star & Kiss100.
Congratulations, that’s a lot of downloads. And have you faced any major challenges since you began?
The biggest challenges has been building trust with consumers and making sure we have the right legal licensing with the content providers.
Okay. And what are some of the lessons you have learnt?
– Don’t focus on the processes in the startup before you are sure they work.
– Get as many inputs as possible from people.
– Get to know your industry. You need to know everyone and what they do.
Thanks a lot for your time. We wish you all the best with the startup.