Alan Knott-Craig Jnr's surprise exit from Mxit leaves the social media network without its charismatic leader, and questions are being asked as to whether it can find another CEO strong enough to propel the brand forward.
The CEO left abruptly yesterday, just more than a year after buying into the company through his World of Avatar venture.
Knott-Craig Jnr has now taken a hiatus from the business world. His departure left the market swirling with speculation and rumours around what could be behind his difference of opinion with World of Avatar shareholders.
This is not the first time Knott-Craig Jnr has left a company suddenly, as he previously unexpectedly resigned from iBurst just as it was wowing the market with plans for rapid growth.
Mxit is on the hunt for a new CEO, but for now CFO Francois Swart is at the helm, while the market wonders what will happen next at what is Africa's largest social network.
Growth trajectory
Knott-Craig's departure was announced in a brief press release yesterday afternoon. Details around his departure are scarce, and Knott-Craig is not answering his cellphone and is understood to be taking his family away for the weekend, before taking a break from the business world.
"While the shareholders and I share the same vision, we differ on how to get there. Therefore, I agreed to go my own way. I wish them all the best for the future. Mxit is Africa's biggest tech success story, and can be a global success story," he said in a statement.
World of Avatar bought a 90% stake in Mxit last year, while 10% remained in a staff trust set up by Mxit founder Herman Heunis. World of Avatar's co-shareholders include the family trusts of two FirstRand founders: Paul Harris and GT Ferreira. It is believed these are the shareholders with whom Knott-Craig had differences.
Knott-Craig Jnr is seen as a charismatic leader who took Mxit to new levels and raised more awareness around the company than its previous low-profile head, Heunis. Knott-Craig Jnr was also more approachable and is credited with breathing new life into the social media company.
The 'rock star' captured people's imagination, and contributed to both Mxit's image and growth during his year at the helm. Mxit has become SA's biggest technology company, "in no small part due to Knott-Craig's involvement and vision over the past year," says a statement issued by the company.
Casting a shadow
Knott-Craig Jnr's sudden departure is cause for concern as it will not reassure potential investors, which Mxit will need to implement its strategy. The group is set for massive growth, "following a R100 million investment by shareholders".
The company says it has a "window of opportunity and is pursuing aggressive growth by increasing the user base in Africa through partners in targeted African countries". Mxit has 135 permanent staff and 10 million active users.
Mike Sharman, owner of digital communications agency Retroviral, says while Knott-Craig Jnr's exit will not affect end-users, it does make investors nervous. He says if Mxit is to either make a growth play, or look at an exit strategy, it will need external investors to buy into its strategy.
Mxit says its current strategy remains unchanged. The group's technology and base is fundamentally sound and it will continue to operate. However, it now has only two directors: Swart and Marnus Freeman, neither of whom have the same mass appeal as Knott-Craig Jnr.
Sharman says the current situation casts a shadow over what happens next at Mxit, as the market will wonder who in SA is as charismatic as Knott-Craig Jnr.
Getting a reputation
Sharman adds that when Knott-Craig Jnr reemerges in the market, he will not find it so easy to capture investors' attention. He points out that Knott-Craig Jnr has exited suddenly before and is developing a reputation of getting a company "rocking and rolling" and becoming the brand, and then suddenly leaving.
Sharman says Knott-Craig Jnr's departure from Mxit is sad, and while people do not know what is happening behind closed doors, the move does not bode well for his next big thing.
Four years ago, Knott-Craig Jnr suddenly bailed out of iBurst just as it was gearing up for rapid growth, choosing instead to all but retire to Stellenbosch, which is where Mxit is based.
In a recent interview with Brainstorm, Knott-Craig Jnr said the surprise move from iBurst was prompted by relationship issues in his marriage. "I almost ruined my relationship and I almost ruined my life. It was more important to be at work than with my family," he told Brainstorm.
"In April 2009, we had just had our first child and I woke up thinking, 'That's it, I'm going to get divorced. My wife isn't supporting me, I have all this pressure at work and she's not helping me.' And she's saying, 'You're not helping me, you're not supporting me.'"
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