One person who is notably absent among the investors in Alan Knott-Craig’s new venture, HeroTel, is former FirstRand CEO Paul Harris, who had helped bankroll Knott-Craig’s acquisition of Stellenbosch-based instant messaging platform Mxit in 2011.
This is not surprising given that the two men had a big falling out over Knott-Craig’s management style and over a failed plan to conclude a deal with Cell C that could have helped turn around Mxit’s fortunes.
Harris and former FirstRand chairman GT Ferreira were keen backers of Knott-Craig’s plans for Mxit. But a year after taking the reins at the technology company, Knott-Craig was forced out of the business amid much unhappiness among the investors.
Knott-Craig says Mxit had planned a strategic deal with Cell C, which was at the time led by CEO Lars Reichelt.
The deal should have meant that 6m Mxit users not already on Cell C would be encouraged to move across from rivals Vodacom and MTN. The plan was not that Mxit was going to sell advertising, he says. “It was going to sell airtime!”
But Reichelt left Cell C while the deal was still being finalised, and Knott-Craig’s father, also Alan Knott-Craig — the ex-Vodacom CEO — took the reins at the mobile operator.
“My dad said, ‘I’m not going to be accused of nepotism.’ The deal was stopped. I tried to get MTN and Vodacom involved, but they weren’t interested. The investors ran out of patience.”
Knott-Craig says he met with Harris six months after being shown the door at Mxit. “We agreed we don’t agree on how to run a business and he wished me all the best for the future. I hope he is rooting for me.” — (c) 2015 NewsCentral Media
