by Adam Smith
Meghan McCormick’s road to starting OZÉ – an app-based service to help small businesses in West Africa – was bumpy.
Years before the newly-formed company – which just scored a $75,000 Harvard award – was formed, it was the seed of an idea planted in Guinea.
As a member of the Peace Corps working on a project called Dare to Innovate, she helped promote and support entrepreneurship in a region dogged by tough poverty and high youth joblessness.
A tight ship, the crew of volunteers at Dare to Innovate numbered only a half dozen, with additional support from local partners.
But shortly after things got going, they hit a road block.
“A week before our second accelerator class was supposed to start, the Peace Corps evacuated Guinea because of Ebola,” said McCormick, now a dual degree candidate in business at MIT Sloan and public administration at Harvard Kennedy School of Government.
“We had this moment of, ‘Do we let this go, or do we pull ourselves up by our bootstraps and figure out a business model that allows us to be a sustained organization?’”
The team chose the latter, and built out Dare to Innovate as a nonprofit. Just about a month ago, OZÉ spun off as a for-profit, Africa-first venture.
Today, both projects are gaining momentum. Dare to Innovate now has over 30 employees and expects to pull in $1 million in revenue this year. OZÉ has a team of eight – and hiring – and is now closing its first seed round of funding, after winning a Harvard University President’s Innovation Challenge contest and grants from MIT.
BostInno spoke with McCormick about OZÉ, its mission, its funding plans, and why it chose to set up shop in West Africa, with its sights set on going world-wide.
BostInno: Talk about the mission of OZÉ?
McCormick: We make tools that help small businesses launch and grow across emerging markets, starting in West Africa. We have the hypothesis that what gets measured gets managed, and if we can take data from a pile of (ledger) notebooks and aggregate it in these digital platforms, then we can actually help economies operate more effectively.
BostInno: Your focus is in Ghana. How do businesses operate now in the area?
McCormick: The way that small businesses are managed, they do cash accounting in ledger books. It’s actual paper and books. … They don’t know how to turn that data into insights, into action, into profits. … So, these markets where 95 percent of these transactions happen in cash, we don’t have that kind of rich data that is generated by digital payments or credit cards to create the market data that you need to really make decisions in context. By using the ledger books as a way in, by digitizing them, we can (use the data) to help them make better decisions.
BostInno: How can you capture this data if people are using cash instead of credit cards or mobile payments?
McCormick: …It takes just three clicks to log a transaction (with the OZÉ app)…. Take a picture of either the receipt or the item, put in the amount of money that came into the business or left the business, and categorize it from a drop down menu.…
We’re geotagging that data, and they can add in more detailed descriptions, and each transaction can be marked paid, unpaid or partially paid, and if it’s unpaid or partially paid, there’s a place that captures the name and due date of the person who owes you money, or who you owe money to, and then we give reminders. Eventually, we’ll be able to remind the other party of the transaction.
BostInno: So it sounds like you’re taking the process out of that record keeping?
BostInno: But how widespread are cell phones in Ghana?
McCormick: One of the reasons we’re starting in Ghana, is because of the mobile penetration. They have the fourth-highest mobile penetration on the continent.
BostInno: What happens after they start using OZÉ for recording sales?
McCormick: Once they’re collecting the data very consistently … the next functionality that they can unlock (is) to have multiple user accounts…. The next thing is goal setting … and “what if” analysis. This is where we really begin to look at your data in the context of other businesses like yours: What is the expected impact on sales if you increase your marketing spending? What is the expected impact on cost if you start buying in bulk? There are all sorts of tools that use artificial intelligence to enhance human capability – that support decision making, but doesn’t replace decision making.
The next phase after that is their financial statement. … Then we start giving them messages about how to manage debt and how much dept they can take on … and then we can actually connect them to financial institutions … so that they can get a loan that they would have been shut out from before, because they didn’t have good performance and they didn’t have good financial records.
BostInno: Have you taken on any venture funding yet?
McCormick: We’re dealing with the paperwork right now. We about to close out our seed round. It will be around $500,000…. We were able to have a product in market with hundreds of weekly active users before taking on any dilutive capital, which is really exciting because working in a frontier market, your burden of proof is a lot higher. If I went to some of the investors in Boston … I could get capital based on promises, but because I’m doing it in Ghana, I need to attract capital based on our traction, which would not have been possible without the financial support of MIT.
BostInno: Is there any plan to broaden this to other places?
McCormick: One of our … stakeholders … said, “Look, don’t come in here and make something that’s good for Ghana. Make something that’s good.” I think that what we’re doing is globally unique. … If you step back and put yourself in the shoes of a small business owner, financial statements are not the most valuable aspect of bookkeeping. It’s the decisions that you can make with more confidence because you can understand where you’ve been and where you’re going. I think that we’re really the first platform that’s taking persuasive technology and gamification seriously as a tactic to change people’s behavior around bookkeeping.