An example is 29-year old Justin Stanford, a self-made Software millionaire entrepreneur who has managed to create a technological innovation hub christened Silicon Cape in Cape Town, South Africa. His first two business ideas didn’t work out and left him penniless, before his discovery of an anti-virus software product in Eastern Europe which became his get out of jail ticket. Now, the IT geek from Stellenbosch, Cape Town, who dropped out of High School, aged 18, to launch his first online venture from a friend’s garage, sits atop an information technology empire.

Discover your passion sooner rather than later and conquer adversity

Justin Stanford fell in love with computers at a very tender age. His strange habit of tinkering around with his father’s PC ensured that the intricacies of a machine that many had yet to become familiar with became self-taught. Eventually Stanford, would drop out of high school and try his luck at business.

“When I was in prep school, I was an A-plus student, top of the class. My mom always pushed me to do well, so I did. It was the same in the early part of high school, but when I was in standard seven (grade nine) my whole family was involved in a massive car accident. My mother and my sister were killed, the rest of us, my brother, father and I were all lucky to make it out alive. When this whole thing happened, it turned my whole world around,” said Stanford.

“Firstly, I was a bit amazed to still be alive. Secondly, you realise that anything is possible; you don’t actually have to do things the way everybody thinks that you have to do them. I was always interested in business and had always wondered about this idea of starting up my own company. So I started losing interest in school, and was thinking much bigger than that. I was already looking out into the world, looking for ideas, and doing little businesses on the side,” Stanford further elaborated.

“I was always fascinated by business and technology. I ran a few businesses on the side, but eventually had to go back to school. I hated it! One day, I couldn’t stand it any longer and told my dad about my plans,” Stanford once remarked. Although, many of his peers and elders scoffed at his risky move, Stanford remained undeterred in his relentless desire to venture into business, because he figured that he had nothing to lose.

Develop your passion and create your own opportunities

“I was always interested in technological stuff, even from a young age. When I was nine, my dad bought us a PC. I liked fiddling with it and breaking it. I had a talent for it and I understood it. So I was understandably excited when the internet came around in 1994. I didn’t have internet access myself, but I knew people who did, so I would always screw around on their computers or whatever. And at the same time that I was thinking about business, I also thought about what kind of business and I realized that technology was the best way forward,” says Stanford.

”In the mid-1990s news of young guys abroad selling their online start-up ventures for millions started filtering through to SA. I was inspired and decided that I wanted to get involved. I left school early and struggled for a few years before launching my first successful venture – ESet, a global anti-virus software programme that’s now utilised in 20 countries. I had no formal training; I learnt everything I know for free online. Back then people thought I was crazy and that I could never pull it off, but today there are loads of crazy young people doing it; the new generation has a different approach,” Stanford further explained.

Even without money, you can still be a successful entrepreneur; a penniless Justin Stanford discovered his goldfield in Eastern Europe.

“I told them that if they could see to a more user-friendly interface and repackage their product for Western consumption, I wanted in,” says Stanford, referring to ESet, a Slovakian anti-virus product that was astonishingly good technologically, but marketed poorly.

Humble beginnings and bootstrapping

After convincing his principals to do business with him, they never suspected that he was a one-man show with a door for a desk and no money. After Stanford went for three years with no luck and in the wilderness living off R2,000 (about $200) a month, today, Eset’s Nod32 which is a multi-award-winning anti-virus product has made it possible for 4Di Capital to branch out into the comprehensive ESet Smart Security Suite. Eset has been rated one of Deloitte &Touche’s 500 fastest-growing technology companies worldwide for consecutive years. Stanford sits on its global marketing taskforce and provides critical input into new product development.

Stanford says, “I applied my mind and devised some low-cost distribution and marketing techniques. I realised we could produce and disseminate quality press releases cheaply by applying our industry knowledge, leveraging virus outbreaks as our angle, and employing the broad wires.” While doing a good job of shoestring marketing, he also built an online distribution platform that auto-generated invoices, issued licences and allowed download, all this without any human intervention.

Inspiration for the Silicon Cape Initiative, and Venture Capital

A strong belief in South Africa’s potential to become a leading technology innovation hub, led him to co-founding the Silicon Cape Initiative, a non-profit, community –driven movement that aims to turn the fertile cape into Africa’s own Silicon Valley.

“When I started out there wasn’t an IT ecosystem in Cape Town. Start-ups worked individually and there was a perception that you had to leave SA to make it big. Vinnie Lingham and I wanted to create a community to promote a virtual concept of Cape Town as an innovation hub, and we wanted to connect businesspeople with a vested interest in technology to resources and to each other. We expected a hundred or so people to attend our launch in 2009 and it was so oversubscribed – over 1000 responded – we ended up having to turn people away,” he boldly stated.

And capital was poured into his venture capital fund by one of the wealthiest families, and one of the richest men in South Africa.

Investment group E. Oppenheimer & Son, a family trust for the South African mining dynasty, boosted the investment capacity of early technology venture capital firm 4Di Capital after investing an undisclosed amount in its 4Di capital Fund.

“We are very pleased to have the Oppenheimer family on board to assist us in capitalising on the growing number of exciting new technology opportunities that need start-up capital and support to penetrate the global market,” founding partner Justin Stanford said.

Another notable investor in the fund is the Reinet Fund – chaired by Johann Rupert, one of the richest men in South Africa and chairman of Swiss-based luxury-goods company Richemont, as well as of investment firm Remgro.

“Venture capital is one piece of the puzzle that has started to fall in place – there was never much to go around in South Africa in the past. Now, it’s not just wine sloshing around in the vineyards around Cape Town, but also old money flowing to interesting investments. The venture capital scene is still small – but there is far more enthusiasm for tech investment than there was a decade ago,” he added.

Already, mobile community start-up Motribe was sold to social network Mxit. “There has been an explosion in start-ups over the past three years,” said Stanford, founder of security company ESet Southern Africa and CEO of Investment holding company 4Di Capital last November. “People are moving down to Cape Town from Johannesburg and we’re seeing some quitting their jobs to become entrepreneurs.”

“Like San Francisco, we have the right mix of people to get things happening – geeks, young people and people with money,” he emphasized.

The major attraction to Cape Town for Tech geeks, and the future of the industry

“It’s a confluence of things. Techies gravitate here because here they’re generally driven more by their environment than money. Geeks like me like things to be organized and Cape Town is not only the most beautiful city in SA, but also the most organised. The universities act as anchors and the coastal geography lends itself to a more relaxed lifestyle. Also, to make initiatives happen you need innovative ideas and wealth to get the ideas off the ground, and the lifestyle here trends to attract wealthy investors,” he hastily stated.

Stanford further says, “We’ve got a lot of bright young people here and the capital they need to grow business. Expats are returning from abroad and people are moving here from other cities in SA because this is where it’s all happening. My venture capital company 4Di is re-investing in the next generation of start-ups, and individual angel investors and initiatives like Google Umbono are identifying good ideas and growing them. Internet access is widespread and relatively affordable here and there are opportunities for technology to contribute to economic development and create social change. It’s a strong tool for empowerment and a potential economic driver, and it’s a great enabler that doesn’t require physical infrastructure.”

In conclusion, Justin Stanford’s story is testament to the undisputable fact that a combination of resilience, passion, hard work and vision, will eventually help you to achieve anything you desire.

” What got me to my real beginning, without a doubt, was just perseverance. You also need to be a good observer and a good listener. I spent a lot of time listening to what much older and much wiser business people had to say. I still do it today,” he remarked.

The post Diary Of An Under 30 CEO: From High School Dropout To Entrepreneur appeared first on Ventures Africa | .

Recently, the media was agog with news of the launch of Nigeria’s first online university –Beni American University (BAU), which seeks to absorb a great number of students, thus reducing the rate and number of students who are without proper higher education. According to its website, BAU is West Africa’s only low cost international academic institution dedicated to the advancement and access of higher education to everyone. The high-quality low-cost global educational model embraces the worldwide presence of the Internet and dropping technology costs to bring university-level studies within reach of millions of Nigerians.

The university, founded by Gossy Ukanwoke, a 24-year old Nigerian Management Information Systems graduate from the Girne American University, was created to fill up the valley in the Nigerian educational system which is primarily due to infrastructure challenges. As a sister to his first startup, Student Circle network, an academic social network that brings over 10,000 free academic notes, essay and journals from over 200 universities globally, Ukanwoke’s BAU “is a proper university with a proper learning structure.” This also means that at the end of the Degree or Certificate programs, students receive a certificate and their transcripts. According to Ukanwoke “Beni American will continue to set examples in the African continent.”

Ventures Africa’s Busayo Sotunde recently sat with Gossy Ukanwoke, who has been described as Nigeria’s Mark Zuckerberg, to get insights to his social enterprise and what it aims to achieve in the society.

VA: You recently launched Beni American University, an online university. What was inspired this?

GOSSY: There is an obvious gap in the Nigerian educational sector that is primarily due to infrastructure challenges. An online university can allow us to accommodate as many students as possible with very little burden on infrastructure.

VA: Why the name Beni American University, if it is targeted at Africans? Brand-wise, why not a name that sounds more African?

GOSSY: Having a name that sounds more African is a myth and actually makes no difference. Beni American University does not sound non-African because we have American within the name. The American is a descriptive. It says that kind of model the university is running. The same way you have Universities of Science and Technology, Universities of Agriculture, Open Universities etc.

VA: What is the goal of the Beni American University and what are the opportunities presented by the institution?

GOSSY: To provide world class education and training for our students when they are with us and to provide opportunities beyond their study after they graduate. We believe that there is a high level of unemployment to continue pushing out thousands of graduates with no entrepreneurial or hands on skills that can allow them become productive without seeking for regular employment.

VA: What is Beni American University’s business model?

GOSSY: The university is a social enterprise. We provide world class learning at the barest fraction obtainable when compared to universities with similar qualities outside Nigeria. The university is a privately funded entity.

VA: Before you established the Beni American University, you had the Student Circle Network (SCN); what is the synergy between the two businesses?

GOSSY: Students Circle Network has continued to exist as a Free Resource Repository for students globally. It is an entity that its goals do not overlap with the goals of Beni American University. Students from BAU can continue to use SCN like the hundreds of thousands of students who use it daily. However students who use SCN who feel that they need to take the step upwards towards gaining a certificate for the learning they do online, they can sign up with BAU and take our courses.

VA: You once said that you created Beni American University out of the concern and challenge to do something about Nigeria’s failing educational system, what has been the acceptance level so far especially in Africa?

GOSSY: The reception has been exceptional and encouraging. We have students apply daily from all parts of Africa and Nigeria. People are excited at what we are doing and they looking forward to when we can start to accomplish the goals that we have set out.

VA: So far, how many users have subscribed to Beni American University?

GOSSY: In the case of Students Admitted, we have 115 students across Africa.

VA: What are your aspirations concerning the institution?

GOSSY: We are hoping to take Beni American University physical as well. In this scenario, we will have our online university and a concurrent physical university. In line with this, we have announced our acquisition of expandable development land and our visionary plan to develop a multi-million dollar 10,000 student capacity campus in Adija, Benue State.

VA: What is the organisation structure like and the staff strength at the moment?

GOSSY: BAU has a standard organisation structure that every university has. We have staff strength of 32.

VA: You are quite young; have you ever worked under anyone before?

GOSSY: Yes I have taken internship jobs before I got into the university.

VA: What business/ management stuff are you reading at the moment and which have you read that has inspired you much so far?

GOSSY: Currently not reading any. However , Talent is Never Enough by John C. Maxwell has been a book close my heart.

VA: Recent/past partnerships and how has these partnerships help the business?

GOSSY: Our Partners have been wonderful. Our sector is a sector that can only make progress through synergy and partnerships. We have some amazing partners who continue to support our university academically, technically and culturally. Here is a list of our partners - BAU Partners

VA: What extra ingredient do you think youngsters need to succeed in the outside world?

GOSSY: Vision, Perseverance and Discipline.

VA: What is the future of online University presence in Nigeria or Africa?

GOSSY: It has come to stay. I see a lot more online universities being kicked off in the region in a very short time.

VA: Any advise to other social entrepreneurs?

GOSSY: Know why you are a social entrepreneur. Have a vision and a goal and pursue it without paying attention to any negativities.

The post Diary Of An Under 30 CEO: Using Social Enterprise To Save An Educational System appeared first on Ventures Africa | .

We always believe there is a future in any business venture, especially when no one else believes in it. In African markets, the chicken business is largely recession-proof, and now Gideon Gono is taking aim at this market, as things are not yet that competitive at the top end of the spectrum.

At first glance, Gideon Gono, seems to be lurching about. And furthermore, on first sound his remarks seem to be mere hallucinations. It is easy to see why Gideon Gono wants to move into the African market, with chickens, you are looking at 35 to 36 days to get your returns. Despite how the economic downturn strikes at the heart of the continent, the commodity is never at risk of becoming a commodity with shrinking margins, chickens always defy financial recessions.

For those unaware, Gideon Gono is the Reserve Bank of Zimbabwe governor, who has amassed wealth, slowly and quietly. Even though he claims to have begun as a small-time chicken farmer in the 1970s, it’s only now that his Lunar Chickens project has virtually become something of substance. Gono is not new to business, as his other notable foray into the flower export business was halted by the imposition of a Western embargo on him, and he now runs Lunar Chickens from the site he used to produce his flowers.

The general public will always greet his steady wealth accumulation with scepticism, however, for the wise entrepreneurs, the moral of the flower story is that once there is an insurmountable impediment right in front of you, it is wrong to lose determination to create wealth, just create another income stream for yourself. Even in desperate times, always have a knack for reinventing yourself and your business empire.

Vision and Future

For the umpteenth time, let us remind ourselves as entrepreneurs, that to be successful we should never tire of being excited about our vision and future, and Gono is too excited about his future as a possible chicken magnate. “By 2020, I must be the first chicken billionaire in Africa,” he has boldly declared.

Still, it would be wrong to underestimate the power of having several different visions for your business as an aid to steady continental growth, or the strength and determination to make those visions a success. According to Gono, he has a Zimbabwe vision, a SADC vision, a COMESA vision, and not to be forgotten an African vision.

“Within those visions is a desire to see Africa being self-sufficient in terms of its food production,” he stated as a matter of fact. “I have chosen to focus on the chicken side of food and the situation at the moment is that Zimbabwe consumes on average between 5 000 and 5 800 tonnes of chicken per month. Now local suppliers are only producing 2 000 tonnes per month and the rest is being imported,” he added.

Well, up to a point, in your relentless pursuit for entrepreneurial success, you should always have your vision tied to the reality on the ground. Pursuing business ventures blind-fold, is the major reason for many disappointments suffered by most of our aspiring entrepreneurs right across the African continent. Do you know the numbers, which you need to, satisfy?

Competition and Empowering Others

“There are basically three major producers in Zimbabwe of which we are the second,” he said, in apparent reference to Irvines and Suncrest. “So we are hoping that with time, we are going to spread the production of chickens throughout the country. We would like everyone to get involved whether with a 100 chickens behind someone’s backyard, 500 chickens and so forth, we want to find meaning out of chicken,” he emphasized.

“I have always argued that if you want to empower people say through mining, tell them that they must wait for at least five years before they can get a return; this is for a small mining operation. If you want to invest say through tobacco growing, tell them to have patience, to wait for a year, they get their money, through maize, four, five months. But through chickens, you are looking at 35 to 36 days to get your returns. So we believe that we have got a formula for quickly empowering people in a manner which is also nice, chicken is nice when you eat it,” he added.

Gideon Gono also believes the rural areas need to be empowered, and he seeks to play a more inclusive dominant role, through allowing those in rural areas to partner him. “The way we hope those in rural areas will participate, we would concentrate on technology-related activities, grow the breeders, hatch the chicks, give them to look after, bring them to our slaughter facilities, and take it to the market. Once you begin doing chickens above 500 at a time, you can’t now slaughter them by hand, the traditional way,” he hastily stated.

Furthermore, the more business focussed rural farmers can also be more involved through feed meal facilities. Gono says, ”Where we make our own feed, we want to involve farmers in growing the inputs, the maize, the soya beans that goes into feed but right now the challenge; we didn’t grow enough maize in the country or soya. It kind of like militates against volumes that we would want to produce.”

The Business

Lunar Chickens is a chicken farming business, with highly-automated, large-scale chicken farming processing complexes that are driving the Zimbabwean chicken market. Through high technology, Lunar Chickens has witnessed skyrocketing business, and has managed to corner the market, aided by the attainment of the famed Halal certification. And moreover, because of the Halal certification, quality control is a priority at Lunar Chickens, since prevention is better than cure, such that elimination of the potential for disease-causing microorganisms is particularly a high alert task.

Lunar Chickens as a massive highly-automated operation is split into various units, that include the “Breeder-land”, “Meat-land”, and the “Slaughter-land”, where several processes are undertaken. Due to the highly-automated nature of the business, the only downside is that even with the meat-land having seven large houses that are holding 45 000 chickens each, only a small staff compliment can be involved.

The “Breeder-land”, is where the eggs are laid by the layers, and then taken into highly-automated chicken incubators where machines keep hundreds of eggs at a time warm. Due to the highly-automated nature of this process, it has enabled Lunar Chickens to commercially breed chicks, and the target is to produce one million eggs a day within the next year, just for domestic consumption, and then the vision is to capture the entire African market.

From the hatchery building, the eggs are collected from the coops and taken to incubate. The next process is called the setter stage, where the eggs are kept warm and periodically rotated by state-of-the-art machines for at least 18 days, whilst placed in large automated walk-in incubators. Before the eggs begin to hatch after 21 days, a process called candling, which is an X-ray process is done for 3 days on the eggs.

After hatching, the chicks are wheeled to an inoculation area, where they are sprayed with a vaccine against the common diseases. Afterwards, this is when the money starts rolling into the business, since some of the day-old chicks are bought by out-growers, and others are delivered to different markets by Lunar Chickens trucks.

Otherwise the rest of the chicks are taken to the “Meat-land,” these large grow-out houses are under controlled temperatures. Ultimately, without being too generous with praises, this is a hub of impressive instrumentation and control. For instance, each house has a floor covered with a dry bedding wood chips, whilst the chicks are automatically fed a diet of chicken feed and water, under special lighting to keep the birds calm.

After a full-cycle 36-day grow-out, the birds are taken to the “Slaughter-land”, this is where you will find automatic neck cutters, automatic feather pickers, washer which scrubs the outside body of the defeathered carcasses, and then the cleaned carcasses are immersed in a “chiller” of cooled, chlorinated water.

Interestingly, the internal temperature of the chicken must be brought down to -18C before any further processing. At the end of the slaughter process, that takes only about an hour, irrespective of the format, the meat is packaged by workers at the processing plant, and loaded into cases, and later stored in a temperature-controlled warehouse.

Like Gideon Gono says, “so chickens make business sense,” develop your own business strategy that makes business sense. A possible consequence of looking too much into the negative image portrayed by the media, is that we forget to pick the lessons to be learnt from the pacesetters setting the pace for us.

The post Diary Of An Under 30 CEO: Gideon Gono – First Chicken Billionaire In Africa? appeared first on Ventures Africa | .

To be fair, in this cut-throat business environment you need to constantly come up with new ideas in order to survive the harsh reality of the unforgiving times which we find ourselves. Without the ability to create new ideas, the cost is that you can’t create a vision for tomorrow- a world that doesn’t exist yet. The ability to create a vision for tomorrow will leave you at the cutting-edge of future progression.

One man’s pain is another man’s pleasure. Take Aliko Dangote for example, today he is building an oil refinery in Nigeria, and the rest of the continent are looking on like outsiders, not realizing that this Africa’s richest man will soon have a net worth more than the GDP of most of their countries.

At best, the African economies are on the brink of continuous growth, it is therefore pertinent that new ideas are generated so that we broaden the diversity of the economies and not suffer suffocation. We need the continent to continue on its growth trajectory, and not have to be temporarily buoyed by fiscal stimulus like the developed world economies needed when they were weak.

Toddlers soon learn that throwing a tantrum is the best way of getting what they want. By the same token, Diary of an Under 30 CEO has absorbed the same lesson, and we will continue to make noise about the need to create the next big manufacturing plants on the continent.

The main problem has been a lack of commitment to fully explore what are the billion dollar industries. Most of the entrepreneurship conferences that i have attended, have always challenged entrepreneurs to be innovative in the development of their products. However, very few have challenged the same entrepreneurs to explore the route of adding value to our natural resources. As the general mindset has been set-up in such a way that after formal school, one needs to attend university and then look for a job, and live happily ever after.

The trouble with this mentality is that it has also been extended to entrepreneurs. Once you have a decent business running, that’s the end of it all. But who is brave enough to step in and take the gamble of trying to create a product from the natural resources that we have abundantly on the continent? One notable area that needs development on the continent is to turn our abundant natural resources into finished products rather than export them as raw material, and then later import them as finished goods.

We need to do a lot of dedicated work that will support every good instinct that might want to create the next best way of doing things. Our lack of focus on doing the best we can today has left Africa vulnerable to deals that undervalue our resources. In as much as capital is always a hindrance, however, if the bullish foreign investors are attracted to our continent by our resources, why then, doesn’t the manufacturing of goods happen on the continent?

For all the noise we make about high unemployment, manufacturing will reduce all those rates significantly. The governments also have enough room to manoeuvre as the guardians of those resources. Better still, Africa’s growth should come entirely from domestic demand, even if the global downturn forces Africa to switch the mix of growth from exports to consumption, it would make the future growth more sustainable.

More generally, trade with China is growing, and is forecasted to be rapid in coming years with China’s growing appetite for resources. However, it would also be very beneficial to the continent if sufficient infrastructure development could be implemented, and not have to rely on services as our sources of economic growth.

Again, Aliko Dangote has already set the ball-rolling with his heavy investment in cement manufacturing across the continent. It is now a challenge to the new age entrepreneurs to look into how to optimize the opportunities offered by the resources that we have. The service industry can never be undermined, the best way out of this rot and continuous development is through manufacturing.

Whenever recession grips the developed world, most of our economies feel the pinch through falling commodity prices, and most hardly escape unscathed. Therefore it’s about time that we also start to control the prices, by having a keen eye for manufacturing.

The post Diary Of An Under 30 CEO: Raw Material Export vs Finished Goods Manufacture appeared first on Ventures Africa | .

VENTURES AFRICA – At 26 years of age, starting a business was the furthest thing from my mind. I was into my third year as a Research Analyst at the World Bank Group, surrounded by a diverse group of powerful decision makers who, like me, are passionate about Africa. I was privileged enough to attend meetings with key business leaders, presidents and prominent policy makers from the continent. I was right where I wanted to be. I had found the perfect balance of work hard/play hard. My future was clear and secure. I was going to wait out my contract, pursue a doctorate degree, return to the World Bank in my thirties and begin the long climb through ranks to senior management.

Then something interesting happened. A year ago, I left the World Bank Group to found Hadithi, a tech-based not-for-profit in Nairobi, Kenya. I did not leave because I was disgruntled, but because my job at the World Bank gave me the opportunity to witness Africa’s transformation. The information and communications technology (ICT) policy reforms that were initiated in the early 1990s, coupled with recent investments in ICT infrastructure meant that now, more than ever, was the perfect opportunity for me to start a business that I believed in. Moreover, being in my twenties, I could take the risk to invest my money and more importantly my unrestricted time as part of the returning Diaspora rediscovering Africa and engaging in a new space. It hasn’t been easy and I’ve learned a lot from the challenges I’ve faced and mistakes I’ve made.

Regardless of where you start a business, there are universal challenges. These include overcoming your fear, defining your market, finding seed capital and having the discipline to keep going. While these challenges were present in my circumstances, I’ve added and elaborated on several more specific lessons that shaped my approach to doing business in Kenya and possibly Africa at large.

Trust your Intuition

When I was at the concept stage of my business, I was introduced to several contractors and potential partners. It was exciting (and comforting) to realise that there were so many people with a keen interest in what I was doing and who seemed willing to be a part of it. While this sort of initial proof of concept from others, especially at a very early stage, is extremely rewarding, be sure to trust your instincts. If someone does not feel right, even if they appear right on paper, then they probably are not right for your business. You need to feel completely comfortable with people with whom you will be working. Take your time to find them. Give them quick deliverables and do not be afraid to take action if they do not deliver as planned.

Use your Network

Networks across Africa are small and in Kenya, they are even smaller. First, do your homework. Understand your market and what you are offering. Then list out all the people that you know working in that industry or sector. Start contacting the people you are closest to on that list. Explain what you are doing and get their feedback. Once you have gained their trust, suggest they put you in touch with two or three other people in their circle who can add value to your idea.

Informal is Normal

This was a tough lesson. Coming from a very corporate and structured environment where it appeared that most agreements were struck at roundtables or official lunches, I was very uncomfortable with after hours business meetings. As a woman, I was even more cautious of meeting with potential partners (usually men) after hours. After several failed attempts at rescheduling meetings to fit my comfort level, I finally had to succumb to what seems to be a norm. Some business deals are concluded at bars after a few drinks and then fine-tuned back at the office the next day. As one Ghanaian investor said to me: “I need to know who you really are. And that I can only tell after we’ve met in a less structured environment.”

Cheap is Expensive

As a young entrepreneur, you are probably keen on saving as much money as possible. This makes cheap deals seem more attractive. I fell into this trap as well. Since Kenya has had a proliferation of ‘techies’, everyone knows someone who can code or design for you. I shopped around and found the cheapest option for what I wanted, but as the old saying goes, you get what you pay for. I ended up having to pay twice to get something that met my desired standards. I now know that good services are costly and should be invested in wisely.

Your Business is Not You

When you start out, your business is personal. It’s all your thoughts, effort and hard work. At one point I had a meeting with an influential Kenyan entrepreneur. He wanted to know more about my business and as I explained the business model, he challenged me on several parts of it. Initially, I wondered why he was so abrasive, and why he was beating down my ideas. But an hour into the conversation he smiled and said: “You have a big problem to solve and that’s good because that’s opportunity. But remember, your business is not you. It should grow beyond you.” I often look at the notes from that meeting and I realise how useful it was in shaping future business strategy.

Get Used to Being Alone

When I decided to start a business, most people I considered friends seemed excited and willing to unveil their networks for my benefit. It was great. As I delved further into strategy and my initial enthusiasm turned into perpetual fear, I found myself increasingly alone in the process. Some of my friends did not understand my vision. In fact, most did not understand what I was doing. As an African woman who had been in banking and finance, I was accustomed to being alone at meetings and at most professional settings. However, as an entrepreneur, being alone weighs even heavier. Perhaps worse than this, there are few African female entrepreneurs to provide mentorship. Moreover, most of your cohorts are trying to establish themselves in their careers and might have little brain time for your business. Returning to Africa and to start a business in Kenya, a place I had never called home, was once a far-fetched dream. Now that it’s a reality, I have learnt to be grateful to Kenya and Kenyans, to be understanding and to be patient, as things don’t always go as planned. Founding and running a company in your twenties is difficult but I am glad I did it.

The post Diary Of An Under 30 CEO – Manka S Angwafo, Founder of Hadithi appeared first on Ventures Africa | .

Funding for your business like anything in life is a matter of luck sometimes, and you have to be in the right places, at the right time, to get that breakthrough that you desperately need. Nevertheless, it doesn’t matter how different things seem to look today, getting funding has never been easy, and some of the successful entrepreneurs that we envy today, have well-documented tales about how their ideas were spurned by potential funders.

This column has previously advocated for entrepreneurs to bootstrap, rather that cede control of their dreams and baby to investors, however, there is another school of thought that believes that their businesses require a huge capital windfall and outlay, in order to get off the ground. Furthermore, having been to several conferences on entrepreneurship, one always has the feeling that there is a prevalent myth that there is no funding available to entrepreneurs. Providing a blueprint on this particular myth is our objective this week.

No doubt despite the economic downturn that has struck at the heart of the world’s capital, an influx of venture capitalists and government funds earmarked for the incubation and development of entrepreneurship ventures is readily mushrooming at any given opportunity. Let me hastily state that, there is more funding than at any other time before, available for entrepreneurs in Africa, in each and every phase of the entrepreneurial lifecycle. Admittedly, the prevalent opinion is that no one is financing businesses, and this is the reason why entrepreneurs can’t get their ventures off the ground.

Fortunately, contrary to popular belief, commercial banks, venture capitalists, and an array of financing entities do promote entrepreneurs to access finance through their flexible and entrepreneurship oriented offerings. The deal is simply, know where to look, and more importantly, what the financiers are looking for. Each and every financier has its own objectives and mandate; therefore, it’s of paramount importance to be aware of what those objectives and mandate are.

A somewhat better approach to seeking funding is to choose who you approach, after thoroughly understanding what exactly they are looking for, and making sure that you tick all the boxes. Once again, the main reason entrepreneurs become demoralised and depressed is because they ignore the general information published on websites of potential funders about their objectives and mandate. This now only means that you will just become another spammer, because your business doesn’t suit what they are looking for.

On face value, not all businesses suit all financiers. Officially, many successful entrepreneurs will admit to having tried to access funding from numerous different funders before securing funding. One mildly encouraging piece of news, this could be for numerous reasons, from not suiting the funder’s mandate, to not having all the vital aspects of their business in order. With confidence shattered and funding hard to come by, often you should learn from each rejection, and adjust your business plan and pitch.

Another wild card is setting up a pre-pitch meeting with the funder, if you want to increase your chances of securing funding. This is because it affords you an opportunity to find out what exactly they are looking for, and what you can do to improve your chances, and then tailor your pitch accordingly. More importantly, you might find that there are areas of critical importance that you have not even considered, and would not be able to answer in an interview. A successful application is genuinely a combination of a well written business plan, and preparation for the pitch.

As a result, before approaching a funder the following are a handful of pertinent questions you should ask yourself before pitching: Who is your target market? Have you done a comprehensive market analysis? Do you understand your market? Is your business in line with the funder’s mandate? What are the most profitable areas of your business?

The pitfall of many entrepreneurs looking for funding is failure to accurately assess their expected revenue in comparison to the loan repayments necessary to facilitate growth. So why then do you easily get a rejection? Any funder will always expect to see and make sense of your figures, and will be able to use a law of averages to determine in the worst case scenario how your profitability could be. Any business plan should be economically sensible, for it to get the slightest look-in, unless it’s a new growth area where the profit forecasts can be determined as no bluff, depending on the wild card of the severity of the initial loss-making.

What are your growth strategies? The short answer is, never walk into a meeting with potential funders, and expect them to turn a blind eye to unrealistic growth statistics, inflated sales or profit margins. Furthermore, no one will ever believe that no industry is prone to threats and opportunities, therefore, there will always be competition, don’t pretend like it doesn’t exist. Venture capitalists, private equity partners, and any financiers for that matter want to see a viable business that can make a profit and provide a positive return on their investment.

Moreover, we can’t over-emphasize the importance of building genuine relationships through networking. Investors often place more faith in the individual than the idea. Another mildly encouraging piece of news is that even though the idea is crucially important, however, some investors can back someone through a few failures if they have so much belief in them. Crucially, don’t waste precious time annoying investors with unnecessary non-disclosure agreements. Unless you believe that your blockbuster might face a crunch of losing a patent protection, or some other intellectual property don’t come up with unnecessary non-disclosure agreements.

Furthermore, imitators will always be there and will always co-exist with the originators, therefore, don’t leave out ideas that are crucial to the venture’s success, for fear of it being copied. The simple truth is that, imitators will always be a threat; however, nothing beats a dazzling product that is produced with a keen eye for a gap in the market. Otherwise, most firms would not have survived to this day, and not watched some of their competitors fall by the wayside. Imitators should be an inspiration to your organization.

To put it more bluntly, funding includes all forms of financing, such as capital, grants and investment options/combinations, and is sourced to all the phases of the business lifecycle.

Amid today’s funding frustrations, it is heartening to come across an entrepreneur who understands their business from the inside out, know their numbers, do exhaustive market research and prove the viability of their business’ growth projections. More importantly, know how to approach the right funders. Evidently these entrepreneurs deserve to continue to believe that their ventures can become behemoths and become a listed firm, which is worth having, for listed firms have an ability to raise public capital – if not now, then one day.

The post Diary Of An Under 30 CEO: The Blueprint Of Funding appeared first on Ventures Africa | .

Africa has the natural resources in abundance, why is it then, that we fail to have a multinational that grows its financial muscle to become a dominant global enterprise? Mention Rio Tinto, Apple, Facebook, IBM, Pfizer etc., and you attract everyone’s attention on any continent, because they all want to know what is going on there. Nevertheless, mention some of what we believe are, the big African multinationals, and all you attract is unforgiving stares and frowns on some continents.

It’s not in my nature to heavily, and violently shake my head wondering with disbelief, why the African business landscape has experienced a steady growth in numbers of business ventures appearing on the scene, but unfortunately few have grown to behemoth proportions? If you want to build a long-term, enduring business and brand, read on.

Barely a fortnight and with delicious timing, since clearly we at Diary of an Under 30 CEO became a data dump for mistakes made by entrepreneurs, facts and assumptions about building an African corporate behemoth will bury themselves violently in the reader’s face this week.

In many respects, please forgive the following bad example, unfortunately my aging-memory is now failing me as no African one, came to mind at the click of a mouse (maybe MTN?); essentially Africa has its fair share of multinationals now, employing a sizeable small percentage of the global employable population. However, Starbucks grew from being more modest, albeit with a fundamental goal of offering high-quality coffee beans roasted to perfection, to more recently, opening a new store somewhere every day. Starbucks is another exemplary success story, which is identified with innovative marketing strategies, and a product that has become a subculture.

Amid the confusion, trying to make the slightest sense of my random bad, awkward, and atrocious earlier quotes and questions, it bears repeating without being too dramatic, that the Starbucks example should give you the faintest idea of what we are advocating for, in this article. Something doesn’t sit right when the African continent’s business landscape is dominated by the big international multi-nationals with headquarters on other continents; whilst not even the big African corporates we consider to be multi-nationals, can even dominate the backwater markets of Europe, USA or Asia. As a matter of fact, we are not advocates for protectionism by any government whatsoever; we are steeped deeply in capitalist ideals on this column, and unshakeable in our beliefs in free markets.

However, it’s about time we also back-track a bit from our normal position, and state loudly, African governments should protect the entrepreneurs a bit more, so that they can grow some financial clout to be able to compete globally. More on protectionism and the role of governments will be written about in later articles. A divergence was necessary because some things are so obvious, such that it bears repeating anyway. Nevertheless, this guide is about things that young companies must get right to build ventures of behemoth proportions.

Founding Team

Most of the successful start-ups have multiple founders: the notion of a lone ranger willing a giant company into existence is rarely correct, but an exception to the norm. Usually before you get to capital requirements, projections and bottom lines, there is one necessary fundamental aspect that an entrepreneur should get right: simply find a co-founder(s) who serve as a critical exercise in improving the validation of your company. As a matter of fact, a co-founding team should bring a diversity of talent and high dedication, because it’s stressful when developing a young company. Therefore, pay more attention to character and commitment, rather than ability.

Importantly, the goals and passion of the founding members should be similar. Furthermore, the best founding team of any organization is one that doesn’t have overlapping skills, rather synergistic ones. However, it’s critical that you look for people who complement your skills, and not just rubber-stamp all your decisions. Only a strong co-founder has both the perspective and authority to challenge another co-founder’s ideas at any given time, helping a company remain an intellectually honest enterprise.

Nevertheless, complementary skills are not enough, essentially getting on well with each other and working smoothly as a team is far more important. In addition, the relationship of start-up founders becomes more like a marriage, because you will see each other most of the time. Due to the fact that, initially the founders would be the whole company, the relationship is far more intense than you usually see between co-workers, partly because the stresses are so much greater.

Any venture doesn’t require all the skills for long-term success; in any case, just the basic ones get the job done. Moving forward without a co-founder is risky, and moving on with a bad co-founder is a poisoned chalice, almost unimaginably costly.

To be honest, you are better off signing an agreement before you get stuck into anything, regardless of what kind of a relationship you have with your future partner (s). In that agreement you should include: responsibilities, equity, vesting etc. Case studies of ventures that succumbed to the adult world of lawyers and money are right in our midst.

The Core Values

No serious entrepreneur can profess ignorance about why it’s important to have core values in any organization. A great entrepreneur has the ability to instil values into the hearts and minds of their employees. The ability to establish a set of core values that makes their company unique compared to any other competitor is advantageous, and this is what makes them stand out from the crowd. These values are such that employees and customers alike are proud to work for, and indeed associate themselves with such a company. A set of genuine values makes life much more efficient.

In no way is it a coincidence that Apple, Google, Starbucks, and Facebook, are among the most admired companies globally, and few employees would pass an opportunity to be employed by the quartet. Fortunately, the founders of these organizations were unconventional and upset the apple cart, whilst creating a set of core values that have made these companies unique. These core values will shape the culture that will prevail within the organization.

You want to create a stronger company culture, which will make your employees happier and create more employee engagement, leading to higher productivity. Michael Useem, Wharton professor of Management, and Director of its Center for Leadership and Change Management responding to a question on how you create a common mind-set and culture, remarked that, “It is one of the toughest challenges in management -whether it is a start-up, a mid-term company or a mature company. We all think culture is vague.”

Furthermore, he said, “Culture comes down to what you value. It’s good to have four or five things that we value clearly articulated. You want implicit rules or ways of behaving, and we all are guided by our values. In building a company, though, we are the makers of culture, not just the recipients. We are not just the consumers of culture. To make the culture, there’s no rocket science. It is simply four or five steps of, in a sense, heavy lifting. You have to do it. It’s not easy. But it must get done.”

“With everything you say and every gesture you make, unconsciously this happens. It’s not your conscious intent for the culture to come out of that. But in early start-up phases, people look at you as the definer of how they should behave. In the first instance, it is just you, how you operate: Are you quiet or do you explain? Do you come respectfully into a room or not? As the firm develops, there are often what you might call rituals -that is, celebrations and confirmations. A new product goes out the door, champagne is popped and speeches are given. What was the magic moment when you went from an idea to the first service or product going out the door? Offering that account in as graphic detail as you can is critical for shaping the culture,” he concluded.

From a personal perspective, it is our strong belief that a lot of hard work goes into creating ventures of behemoth proportions, however, your co-founding team and the core values of your organization create a path for you to become a global phenomenon and a legacy builder. Diary of an Under 30 CEO, hopes to see one Africa company employ people across all continents in its lifetime, at the least.

The post Diary Of An Under 30 CEO: How To Build A Multinational Business appeared first on Ventures Africa | .

Competition and the market

“Entrepreneurs should ask themselves if the market really exists if there is no competition”, says Entrepreneurship professor, Peter Bryant of IE Business School, Spain.

Even if you initially have a monopoly in any industry, eventually, competitors will enter the fray. Competition should never be ignored, even if it has a small market size currently, because it will always pose a threat anytime. Therefore, you should know your competitor more than they know themselves. Claims that there is no competition or the incumbents don’t pose a threat to their businesses, amount only to treacherous thinking, because i can assure you that at any given opportunity your competitor is analysing your business, and developing new innovations to counter your efforts. Unfortunately, gone are the days of resting on your laurels, because technological innovations are reshaping industries, and are constantly creating future threats to any industry. Competition doesn’t only mean your other industry peers; rather it extends even to other technological advances that might threaten your business.

Search widely to also identify current and potential imitators, whilst also checking often, as competitors’ initiatives and start-ups maybe difficult to see. For instance, a simple illustration is Nokia. In as much as Nokia was the market leader and the torch-bearer in the mobile phone industry, unwisely they drew so much satisfaction from that, such that they forgot to anticipate or forecast future trends in the mobile phone business. Smart-phones would become the next lucrative gadget to manufacture, and Nokia looked blindly on the other side and missed the opportunity to consolidate its market share by quickly developing its own smart-phones because it had the financial resources and muscle. Even if it wasn’t sure about this new gadget, it could have mitigated it’s risk by making an agreement with a rival to produce a joint venture product, unfortunately for reason best known to the company they decided turn a blind eye to the new craze that was about to change the mobile phone industry. As i write this they are still playing catch-up to Apple, Samsung, Blackberry etc., who have suddenly become the new market leaders.

Furthermore, any entrepreneur should know extensively the competition and develop counter strategies. For example, the big music record companies failed to take Napster seriously, only to realize late that it was hurting their sales, even though they later fought court battles with Napster, the damage had already been done. That is from being powerful, they suddenly became vulnerable, such that when Apple came up with the i-pod, the music industry had no option but to quickly get into agreements with Steve Jobs so that they got the few crumbs, Apple might have offered rather than lose out completely like they did with Napster.

Winning 1 percent of $1 billion is easy in dreams; you have to move mountains to achieve that reality. Never think that customers will always come, because unless it’s a socialist economy, the choices of substitutes will always be available and the customers are not compelled to buy from you if they are not happy with your products, or if they don’t know about your products. Make extensive efforts to develop a relationship with your customers, have your brands imprinted on their minds despite your market size.

A sale is the lifeblood of any business, and marketing is the spine. Great companies don’t just create brands, they also create movements. Movements are created by being held in high esteem, and revered. Entrepreneurs often over-estimate the size of their potential market because of performing inadequate market research. Conducting sufficient research on potential and existing competitors assists you to focus on a market segment that can boost your business, because defining your market segment too broadly is a costly oversight. It doesn’t matter that a bigger market gives you a chance to grab a slice of the pie; you might be forced to compromise on quality too soon because of over-stretching your current resources.

Lastly, ask relevant questions such as: What are potential customers buying now? What is their incentive to switch to buying a new product? Is there enough market demand to support the introduction of a new product?

Focus, Equal Partnerships and Key Customer Syndrome

After you have had that dream about that brilliant and great billion dollar idea, write a business plan early on, even if it’s for your own benefit. Furthermore, being in business requires a road map, just like life in general requires some sort of a plan. The business plan ensures that you set both short and long-term goals for the business, such that you have a reference point to check your progress against along the way. Without a clear vision of where your business is heading, your great idea can get muddled along the way. The good thing about planning is that, it builds habits and habits create actions and actions get things done.

Let’s be honest, entrepreneurs need to see beyond the first 6 or 12 months operation. It’s essential to have a concrete idea of how to keep the company profitable over the next several years. In addition, the companies that flourish are the ones that are not stagnant, but are constantly reinventing themselves, improving their products, services, and finding new revenue streams to increase their turnover. Rome was not built in a day, nor were there no daily developments, meaning that you need to execute your plan and strive for improvement each and every day.

Moreover, let me state that, some companies might not need a formal business plan, however, a start-up that needs significant amounts of capital to grow and more than a year to turn a profit definitely needs a roadmap of how much time and money it’s going to take to achieve its goals. This might require going through the key metrics that make your business tick and building a model to spin off a couple of years of sales, profits, and cash flow projections.

Normally, when starting a business, it’s very tempting to divide ownership equally among the partners and attempt to make all decisions through a consensus. However, disagreements will always inevitably arise, despite the fact that partners might agree in the early stages of the business. It’s also inevitable that partners most often will have different ideas about how much time to put into the business, regardless of what agreements have been made about what level of commitment is required. Therefore, it’s always advisable to ensure that there is a defined leader with adequate authority to make final decisions, and sufficient compensation to remain motivated.

In as much as a gentleman’s agreement is the norm when most companies are founded, however, even that behemoth and revered company called Apple, had its issues which led to Steve Wozniack to turn his back on the company that he had co-founded. One person ultimately has to become a majority owner, even if it means it’s 51 percent it doesn’t matter.

Every business might need to have that one large customer in the beginning to get the business off the ground; however it shouldn’t be a means to an end. Having one customer, who generates more than 50 percent of your revenues can be a recipe for disaster if that customer goes out of business or stops buying from you for some reason. Don’t rest on your laurels because you have one big customer, use that edge to build on, and work on acquiring more customers- both large and small. Customer acquisition is the best funding strategy, since strong revenues improve valuation and reduce financial pressures.

In conclusion, on-the-job experience is the best way to learn about a business. Before trying to launch a start-up, you can gain experience in the field through an internship or a related job. Furthermore, your lack of experience in the industry you are trying to enter can lead to many costly mistakes. Moreover, it doesn’t mean that there are no exceptions to the norm; some entrepreneurs can equip themselves with information about their industry through extensive research.

Lastly, know yourself, trust your instincts, and be prepared to make the hard choices, fail and fail again, be critical about yourself, and most importantly love what it is that you want to do. Above everything, luck matters; always try to be at the right place at the right time.

The post Diary Of An Under 30 CEO: Entrepreneurial Mistakes And How To Avoid Calamities – Part 2 appeared first on Ventures Africa | .

Are you ready to take the plunge? While there’s never a guarantee of success, more often than not, there are about as many mistakes to be made as there are entrepreneurs to make them. Which brings us back to something i posted some time ago- business in Africa is riddled with a sad reality, that for every successful entrepreneur, there are thousand others, not so successful young entrepreneurs, who daily have to face the brunt of the realities of entrepreneurship. The African business landscape has experienced a steady growth in numbers of business ventures appearing on the scene, but unfortunately few have grown to behemoth proportions.

In all fairness, and with this in mind, especially to those despite their hectic schedules, who find it within themselves to make time to- at the least, browse through some of the weekly dosage of musings provided consistently, by your resident serial-writer, on this your favourite resident column, which is an icon of objective business journalism; confers upon us the responsibility to inform them of some of the glaringly apparent common mistakes entrepreneurs make.

From past experiences and education, i will share some hard-earned experiences, and insights gained from lapses in judgement in the development of enterprises. I know, in summary, for the benefit of those who have jumped onto the groovy train too late; despite the availability of many sources to search for entrepreneurship knowledge, i would recommend our only official prescribed source, which is earlier archived Diary Of An Under 30 CEO articles, for expansive explanations for some of the issues covered in this most comprehensive two-part article.

Obsession with the Unattainable Elusive Perfect Product

To tell you the truth, since time immemorial, there has been an unwritten and over-emphasized basic business golden rule, and this phrase serves as a buzzword, the customer is king. Furthermore, sales are the lifeblood of any business, regardless of how perfect or pathetic your products are. Therefore, it goes without mention, that understanding your customers’ wants and needs, are key to business success, and should be your number one priority, after all, they are the best source of ideas and inspiration available to you.

Basically, even if your product is the best thing ever produced, with definitive characteristics that include flawless, better, or stronger than the competition’s, for as long as it’s not what the customers like or need, your efforts to sell it will be futile, they won’t buy it, and would rather find another company that is more responsive to their needs. It’s a cruel fact, but it’s as simple as that. Many entrepreneurs have become victims of their obsession to create the unattainable elusive perfect product. The price of trying too hard to create the perfect product is that the market will change, and eventually the product will become perfect when it has already been rendered obsolete, this is a cutthroat and dynamic business environment, after all.

Honestly, the most important thing is to get the less-than-perfect product onto the market as soon as possible, and if necessary improve it whilst it is available on the market. It’s absolutely a no-brainer to focus all your energies on providing quality products while doing less about marketing them. Your customers’ purchasing behaviour of your products is the only realistic yardstick of truly letting you know how great or perfect your product is , otherwise, the sooner you realize that there is nothing perfect, the better for you. Actually, it’s far more important to face criticism from customers, because this same criticism could be a catalyst that leads you to innovations that can assist your business corner the market, as you develop your product in a way that no one else in the marketplace has done.

It’s noteworthy that it is of paramount importance to spend more time and give your best on making your product the best, however, it’s not worthwhile if the product can’t be sold. Spending more time on developing a product, and less time on selling it, amounts to treachery, for any business enterprise. In fact, to get results every product, no matter how great it is, needs to be marketed. From a personal perspective, i would advocate you to focus 50 percent of your time on your product, and the other 50% on marketing it. It’s suicidal for any entrepreneurial venture to spend 90 percent of the time developing quality products, and 10% on marketing them. If you are unwilling or unable to invest the time and money on marketing, you will lose ground to your competition.

Be certain to listen to the most vocal minority customers. Don’t create a product that has to work on finding a market. Says Rosalind Resnick, founder and CEO of Axxess Business Consulting Inc., a consulting firm,” While it’s hard to build a great company without a great product, entrepreneurs who spend too much time tinkering may lose customers to a competitor with a stronger sales organization.”

Finance

“You also need to understand the fundamentals of money, how it works and how you can make it work for you because it is a scarce commodity, yet crucial to entrepreneurial success,” says Kenyan entrepreneur, Mike Macharia.

Another undisputed business golden rule is that cash is king. It suffices to state that, whilst you may have a booming business with many customers, you can’t pay for your operating overheads without cash. More importantly, money that you are owed only makes it easier for forecasting future cash inflows. Furthermore, let me hastily state that, a business can be profitable without cash, for how long this situation can be allowed to prevail before the business goes bust, is a subject for debate on another day.

Cash is king, at whatever stage of business development. The prerequisite for any capitalist entrepreneur, is to always think carefully before spending and remain focused on the bottom line, after all, business is all about the bottom line. Even with all these corporate social responsibility initiatives, the main objective at the end of the day is the bottom line; forget how otherwise, we are made to believe that it’s for the benefit of the community. The most fundamental purpose for cash in any enterprise is for business-building processes, such as marketing, product research and development etc., and not to be overspent on overheads or fund the lifestyles of your customers.

Until it’s certain that your profits can support the costs, retain humble office space, and furniture, because a quest for a high life, usually lets your expenditure to inflate more than your revenue, which is a no-brainer, since you will suffer a financial crunch. In addition, before profits justify the expense, spend money that is necessary to achieve the company’s objectives.

Another problematic entrepreneurial mistake is the myth about raising capital. Most entrepreneurs waste a valuable chunk of their energy seeking investors not customers through their relentless pursuit of capital and not revenue. In as much as the pursuit of capital can’t be downplayed, it is advisable to work on strengthening your revenue streams, through focusing on customer acquisition which should be part of any funding strategy. Your customers are the best place for your business to get funding, even more dependable than banks or venture capitalists. Strong revenues improve valuation and help reduce financial pressures, never place investors before customers.

Some entrepreneurs raise capital easily, and then afterwards, start thinking of ways to spend the money. Once you are facing this dilemma, you are in a bad space, because every fund-raising initiative should be for a specific purpose. For instance, when you sell part of the company it’s either you want to raise finance to increase your production levels, through purchase of new machinery or equipment, or to purchase new larger premises, therefore, you should not deliberate on how to spend, after you have already raised the finance, there should be an objective behind the need for more finance. Remember, owning the business outright is the best case scenario; don’t sell a stake to fund your lifestyle. At this juncture, let me mention that bootstrapping has its advantage, because too much cash can make you complacent and careless. Over-funded companies tend to get big and bloated too soon, before they can make concrete plans about how to spend their cash.

The post Diary Of An Under 30 CEO: Entrepreneurial Mistakes And How To Avoid Calamities – Part 1 appeared first on Ventures Africa | .

Diary Of An Under 30 CEO, in its own way, is partly playing a part by disseminating information on how to build sustainable business and the principles young entrepreneurs need to imbibe, so as to avert the dangerous explosion of youth unemployment on the continent before it becomes a continental catastrophe. At a time when investing in Africa, is the most used phrase at business forums globally, the challenge for African governments is how they can get their idle youths to join in, on the gold rush to exploit the resources abundant on the continent.

There have been false dawns, and a lot of encouraging nationalist rhetoric about entrepreneurship. Even though this is not racially inclined, the realities of entrepreneurship on the continent should hit home to everyone. It’s never too late to reverse the self-entitlement perceptions of funding that is prevalent among the young black African community; the best we can do, is not get used to expecting that every business has to be heavily funded externally first, for it to get off the ground.

At this juncture, it is no wonder that it seems to be easier for young white Africans, and Africans of Asian origins to start business ventures at an early age, whilst their black counterparts seem to always hit brick walls. Amongst most aspiring black African entrepreneurs, a self-entitlement mind-set has been cultivated, that without funding, they can’t be able to get any business venture off the ground. No other explanation springs immediately to mind for this mind-set and its origins, however, most African governments have failed the young black entrepreneurs, through creating hope among these aspirants, through various initiatives that have eventually benefited the few well-connected ones.

Although there is always scepticism accompanying any government initiative towards developing the entrepreneurship spirit, it is noteworthy, that some African governments are making small strides in trying to foster entrepreneurship on the continent. Moreover, it’s in the public domain that most of these initiatives are failing to achieve the intended goals. Falling victim to corruption, nepotism, and reckless abuse of the funds become the order of the day. This leaves the young black entrepreneurs frustrated and disillusioned, because so many place all their hope on the benevolence of their governments. The ending ruins all enjoyment of what goes before.

This as it may, passes the onus into the hands of the aspiring entrepreneurs, to grab the bull by the horns and chart their own road maps to success. Whenever it’s possible, an entrepreneur should own businesses outright. Not that we want to promote selfishness, however, in the same vein, we want to encourage a shifting of the mind-set from a sense of depending heavily on external funding and not have the courage to build a capital base internally, step-by-step.

Outright ownership of a business means that you make all the money for yourself. It’s always awesome to have your own money at risk, and then have to live each passing day with the consequences of your decisions regardless of whether they are good or bad. Whenever you will take on the risk, the end result is to reap the rewards. Furthermore, the better you are at managing risk, the better chances you have of reaping more rewards. By allowing yourself to take calculated risks that don’t spiral out of control, you get yourself into a situation where your options will be good ones when the big pay check arrives, however, the risks should be measured, that it won’t be hard to see any realistic alternatives, because there are always several negative consequences when the penchant for risk-taking is irrational.

In a sense, it’s never debatable that some people need funding, but giving investors equity solely means the money and in many instances, control of the business isn’t in your hands. Your creativity or ingenuity will never shine when for every idea you have; you need to consult the investors, to get approval on whether that idea satisfies their investment policies. Don’t ever forget that this is your baby and if you want it to be part of a lasting legacy then you need to see it through to the end. Even if you are bootstrapping, know that it’s war out there in the trenches, and that tough times don’t last but tough people do. Therefore, your business will always get to a stage where it will be able to generate enough cash flows even without getting external funding, through proper management systems; the sky is always the limit.

For instance, because of growth some organizations reach a stage where there are no better options for raising finance rather than listing on local or international bourses. However, the most important element of which one has to be able to retain as much control of the business, so that you always get the required approval of voters to push through your ideas. Even though, due to rapid growth some entrepreneurial ventures have to list on local and international bourses, thereby diluting the shareholding, however, most times the faces of the organizations mostly have control in those businesses.

It’s a fact that you can’t control the destiny of a business, if you are like an outsider watching on. How can you have the ability to direct the culture of your company when you are a minority shareholder? You will always be influenced by the decisions of the more powerful ones. Outright ownership allows you to choose the people you work with. Decisions of hiring and firing don’t have to be consulted too much, because the most important thing is to surround yourself with positive people who can give you confidence, and the optimism you need to keep moving forward, to achieve your goals. Work with people who you know will help you achieve success.

Sherry Phelps of Southwest Airlines said, ”The first thing we look for is the ‘warrior spirit’. So much of our history was born out of battles- fighting for the right to be an airline, fighting off the big guys who wanted to squash us, now fighting off the low-cost airlines trying to emulate us. We are battle-born, battle-tried people. Anyone we add has to have some of that warrior spirit.” Hire for attitude, skills can be taught, unfortunately passion can’t. You can’t have the liberty to create your own recruitment policy with someone breathing down your neck. Like every other game, the more you play the better you get. You learn to recognize the good opportunities from the bad ones, by being in the frontline directing operations, not being directed.

Even if you have to start small in your shack, don’t despair, all these big global corporates started from somewhere, and mostly it was humble beginnings. No matter your business model, there is always space for everyone and everything, as long as you can contribute to improving people’s lives. Aliko Dangote aptly summed the opportunities inherent on the continent, in his statement below.

Unfortunately, if you are Africa’s richest person, you get mentioned everywhere, and be quoted at every given time because the serious people always have something to learn from those that have made it before them. Likewise, Diary Of An Under 30 CEO is no exception, to be the best learn from the best, and therefore we will end this week’s diary entry with a quote from Aliko Dangote.

“The opportunities are here, the growth is here. Where else do you get this type of growth? Maybe Asia, but the difference we have from them is that we are starting from a low level. The return on investment takes out the risk. Foreigners will not invest if locals are not doing so. We must lead or nobody will come. The economy of America was not established by the Chinese,” said Aliko Dangote

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