How Copy Cat turned 40 years of technology lessons into legacy

“Even though the idea was a fantastic idea, the two had limited resources at their disposal to import stock, pay people, rent office space, register the company, and no collateral to secure a loan from a bank,” says Vishal Patel, the director and chief executive of Copy Cat Group.

Mr Patel says funding a start-up then was their biggest challenge, but a burning desire and conviction had them mortgage their family homes, selling other assets to raise money to import the equipment and quickly generate revenue.

With zero profile, manufacturers were hesitant to supply equipment to the ‘one-time story’ firm, and their friends outside Kenya stepped in on their behalf.

“Being quite nascent, those skills did not exist, and training of skilled staff is something they didn’t factor in the plan, and there were no machines for engineers to practice with,” he says.

The two co-founders’ strategy was already heavy on selling equipment, and customers appreciated the promise to maintain the equipment. They never looked back, opening their first shop on Nairobi’s Monrovia Street. A big risk only backed by conviction.

Mr Patel says that in the first decade of business, Copy Cat’s year-on-year growth was exponential because the vision and work put in were spot on, growing from the back end as much as it was growing from the front end.

“1990s, came the IT era, and being an office automation firm, doing not simple things of copiers, fax machines that were revolutionary, our equipment and services took us to all spaces, and it was natural to stumble across IT teams who would request Word processors, and we became the first to bring that,” says Mr Patel.

That, he says, drove them quickly into the IT space, and their technical and after sales support became the driving force and niche after realising that the IT space needed their help, not just the equipment, but to have it networked.

The IT team became a fully-fledged department, so much so that the office automation department currently contributes only 25 – 30 per cent of the company’s revenue.

The co-founder, Mr Patel, says, succeeded because they stood by their commitment, looking at it as a promise to deliver what they say and if not, change it or refund the client.

He also attributes the company’s success to honesty about their products and engineering, and adjusting accordingly to customer needs, flexibility, and transparency as that is the only way a company can last in business for that long.

The transition

Being a family business, succession issues always abound. Mr Patel says transition is more of a culture issue and that in his community, at least the eldest is expected to join and take over what the father is trying to create, and for him, it was not a matter of choice. His plan was to further his studies, but that came a cropper after his father made him join the family business.

“I joined the company in 1994 to gain some experience, but was moved to Tanzania after Copy Cat acquired Business Machines Tanzania and ended up staying there for 10 years. It was a great learning experience mingling with suppliers, the business community, and growing the business,” he adds.

With him at the helm, Mr Patel says Copy Cat has embarked on a digital transformation of their customer needs with a focus on process automation, cost reduction, and also enabling customers to incorporate AI in their operations.

The transformation has equally seen the company undertake construction of data centers for government, banks, and telcos, which they still do.

Operational obstacles

To Mr Patel, the biggest issue he faces as the CEO is that the biggest consumer of technology is the government with its big appetite for automation and digital transformation.

However, procurement policies are restrictive in that a scope is drawn, tender floated, but the biggest mark in the evaluation process is on price; however, in IT, one is not buying a product but rather a total experience and outcome.

“You don’t get a chance to explain that, and even if you get a chance to, tendering policy doesn’t allow that, so government ends up buying products that don’t necessarily work for them,” Mr Patel says.

Another challenge, he adds, is that in the private sector, there are many clients who have more faith in external partners than within because they feel those projects are big in scope and value and wouldn’t want to take a risk with local firms until they realise that external support is expensive and start to seek interventions from local firms.

“The other issue lies with the human resources. We have amazing talent in Kenya, but there are not enough, and competitors can poach your staff at any time. The younger workforce is not about job security but the best deal of the day, a different breed of workforce, and retaining them is difficult,” says Mr Patel, adding that building a stable workforce is a daily challenge and firms lose money spent on training, building work culture, and alignment.

Dealership arrangements

A few years back, Copy Cat Group signed a partnership deal with Canon, a Japanese conglomerate, so how does that deal fit into the former’s growth strategy?

“Canon wanted a stable partner with a reputation, and we went through a long process of discovering how that can be beneficial to both parties. Theirs was to bridge the gap in product lineup that their other dealership arrangements didn’t have,” says Mr Patel.

Advice to future investors?

Mr Patel advises that any enterprise intending to have a similar arrangement should find out why they want to sign up with you. Does it just add another feather to their cap, or is there a strategic value in it? Do you both gain, and if those questions can’t be answered, then it is a non-starter.

“If you ever sign up with someone because it is adding a feather to your cap, then you are not going anywhere,” he advises, emphasising that similarly, do not sign up because your competitor has signed a deal somewhere.

As for Copy Cat Group, he says the focus has never been on their competition but rather on their customers.

He adds that Copy Cat Group is changing as a company because yesterday’s technology will be weaned off and in the next two years, some of the things they have been doing over last 40 years will be phased out as they shift focus to digital consultancy on AI with key focus on e-governance solutions that is based on AI, moving into health space with AI.

Learning from acquisition gone wrong

Some of the biggest mistakes entrepreneurs make are driven by ambition rather than strategy. In their quest to entrench their foothold in the market, Copy Cat spent a fortune some years ago acquiring their biggest competitor, Gestetner Plc London’s Kenyan subsidiary, which was up for sale.

“We feared that whoever bought it would give us fierce competition,” he says. “We then merged that entity with Copy Cat, and numbers plummeted. It should have been run as a separate company with clear walls to corner the market. That was a strategic mistake; even though we recovered, it is still my biggest regret,” he says.

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Editor’s note: The article has been revised to correct Rajoo Patel’s name (not Raju) and to clarify that Canon is a Japanese conglomerate, not an American one, as earlier indicated.