Entrepreneurship, Business and Life!

Archive for February, 2012

Why it takes so long in Kenya

Every time I am asked how long it takes for a great business to get established in Kenya when it has been started from scratch, I always give the ballpark figure of about 7 years. This shocks people, because a lot of foreign publications on entrepreneurship and business always talk about 2 years, 3 years at most 5 years. The reality of the market in Kenya is that it takes time. There are a lot of spaghetti problems which you will meet on your journey that nobody prepared you for, and they will have real impact on your business , sometimes even on your life (the life threatening kind). Here are some of them.

Cartels 

You start your business, and start making those marketing calls and visiting clients. Soon, they all start giving you the cold shoulder.You get a few small deals and suddenly you find you are struggling to get raw materials or resources that enable you to deliver quality goods and services. You dig deeper and realise there is a group of business people who have a hold on your industry and they dont like newcomers. They will do anything to kill your business from choking your supply chain to sending police or KRA to your door.

Government bureaucracy

It is perplexing just how complex and slow the government can be in responding to local entrepreneurs (while laying red carpets for foreign investors, using our hard earned tax money). Getting licenses, permits and many other things that are not really necessary to your core business can be an expensive and time consuming affair. Someone should set up a business to overcome this animal called Government.

KRA

Taxes in Kenya are like calculus. And worse, they change every year when our minister reads that long speech we all pretend to listen to and only the hotshot accountants can understand what he is actually saying. Before you can afford that accountant who understands all of them and can keep you out of trouble, you get stressed trying to beat deadlines while avoiding penalties. In the meantime, your morning prayer every day is “Dear Lord please keep the taxman away from our nondescript hidden office” .Woe unto you when they walk through the office front door. This actually makes wise entrepreneurs to avoid the media until their books are all cleaned up. In the meantime, “stealth operations” are the order of the day.

Skeptical Kenyan Consumer

Kenyans are very skeptical of new products and companies. Particularly big companies. It doesnt matter that they were your clients when you were at the agency. once you jump out, you have to build your own credibility and they will not be the guinea pigs for it. You are forced to prove yourself by doing pro bono or loss making work in order to come back and say that “so and so are my clients”.

Extortion Rings

Despite paying government taxes, there are areas that have additional tax collectors in form of gangs, which operate openly and even give you receipts for the hard earned money that you pay them. It leaves you questioning whether at some point, our police force deliberately outsourced protection services to some of these territory managers.

Goodwill

For some reason, there are those who believe that over and above the exorbitant rent you will be paying, you need to pay them a lot more money at the beginning for them to be gracious enough to allow you to operate from their strategically located premises. This significantly reduces the period in which you can break even. Imagine having to pay 2 million shillings extra to get a space in a commercial building . Thankfully , this is reducing since  we are slowly beginning have an oversupply of commercial spaces as the building boom rages on.

Peculiar markets

Kenyans tell you they like a product and would spend money on it, then they don’t buy it when you avail it. We have a culture of being polite and too afraid of speaking our minds. All people you will sell to, will always leave you at a space where you think they are buying. 6 months later you figure out they are not real buyers, just afraid of saying no to you and looking bad (or broke).

Dominant market players

Every market has 1 dominant player, few middle players and thousands of broke or unscrupulous players. Look at beverages Coke dominates, few in between, many other unknown brands try to entice you. Beer, EABL dominates, Keroche nips at their market, Kumikumis blind people all over. Advertising, Scangroup dominates, a few struggling local players, former marketing executives fight it out for the crumbs. Telecoms Safaricom Dominates……im sure you get the drift. My assessment is that other players simply try to emulate the market leader rather than carve out their own niche or unique products that sell themselves to frustrated markets.In the meantime, some dominant players can resort to legal means that guarantee you wont get business,like giving unfair incentives to your retailers or suppliers until you run out of your savings and dust your CV.

Ignorant business leaders

Many large business owners might have gotten there through political patronage, corruption or inheritance from their fathers chief gifted wealth in colonial times due to his loyalty to the system. They do not understand the value of a good product or service and getting them to spend is like pulling out their teeth without anaesthesia. Which leaves you, the value selling entrepreneur at a loss of what to do.

Broken legal system 

Someone screws you over, you take them to court.They win and you pay their legal costs and they never pay you your money. You lose faith in the legal system and dust your CV(again,last time you were encouraged to stay on). Months later you see them celebrated in the entrepreneur section as a model business person for the country to laud.

Greedy partners

They want you to do all the  hard work, they want to make all the money.All because you foolishly let them  put in Ksh 300,000 to be a 50% partner because you thought money would solve all your problems. You burn through it in 2 months and are back to scratch. Need I say more? Make sure you share the same Vision, and more importantly VALUES before you partner with anyone. More on this later.

Small and broke private sector

In other developed economies , the private sector is usually much larger than the Government and development sector combined. In Kenya and Africa in general , Government and NGOs form the largest spenders. And both are bureaucratic and rife grounds for corruption, enough to discourage any well meaning entrepreneur. Since every large company wont touch you with a 10 foot pole, you are left convincing your fellow broke entrepreneurs to be your clients and get into the vicious cycle of not paying each other.

By the time you navigate the above maze and survive break ins, skeptical family, debtors, homicidal employees….. time has passed. And a lot of it. Which is why when you see an honest succesful Kenyan business person, salute them and acknowledge that they are tougher and more resilient than a Kenya Army soldier (before they went into somalia that is). However I have found that the rewards to the resilient ones is usually quite large because you step into the promised land and find very few players to share the spoils with. So it pays off and next week ill talk about some of those businesses that I have come across.

The good news is, with the changes happening in the judiciary, government structure, macro economic environment (don’t worry i also can’t tell you exactly what that means but i believe the CITIZEN, NTV and KTN business news guys) its getting better and easier and eventually we will get to the place where it takes those 2 years you read about in western literature.

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A powerful vision is ALIVE!

Every entrepreneur begins with a vision of the future.  But there are a few who begin with a powerful vision. One that goes way beyond themselves and if brought to pass, would revolutionize how things are done in the industry, society, culture or economy. It would transform lives, change lifestyles, force people to adopt a new way of doing things that makes them wonder how they survived without you in the first place. They find it hard to imagine a life without you and what you put in place. This type of vision is for a select few, those who see things that others would only experience to believe that it’s possible.

This vision usually has a life of its own. And despite the fact that the vision bearer may think they own the vision, it actually owns them. And it goes through a life cycle.

A Powerful Vision usually begins with many excesses but goes through a period of refinement, where it strips away all the chaff and begins to rebuild itself. These excesses come in the form of exploitative business partners, expensive offices, impressive gadgets and machines, excess staff, and pretentious clients many of whom don’t believe in your product or services as it is. At this stage the Powerful Vision looks down at the vision bearer and says “The vision bearer is not ready to carry this vision, if they continue like this, the powerful vision will not come to pass”. The vision is wise enough to recognize that the initial configuration of the set up is bad for the vision. The vision at this point is usually driven by greed masked as change for society. Whilst the vision bearer may say they want things to be different, their primary objective may be to grow rich and wealthy and make a lot of money for themselves. But the Powerful Vision knows that this focus will destroy the vision bearer should it happen too soon. The Powerful vision usually sets out to straighten things out because it knows that the vision bearer is not ready or maybe the market is not ready. And this straightening of things will take time and test you, the vision bearer, to the core of your being. Setting you on a path of true soul searching and self awareness.

The powerful vision will systematically take you the vision bearer though a series of tests. It will strip away initial partners who were in it for quick or selfish gain without putting in any work. They will begin to fall out as soon as they realize it will not be an easy journey. Then it will ensure there isn’t enough money to sustain a lifestyle of careless spending. In the times of need you will have to get accustomed to careful spending, cost cutting and budgeting, many times unable to do things aligned to your greed. Your self esteem will be tested when all people around you seem to be doing better than you. It will strip away initial cheerleaders who begin to doubt your prowess as they walk away to pursue their own interests that put food on their table. They will get tired of giving themselves to your cause for no immediate return. It will strip away employees whom you thought would die for the company only to realize you are the only one willing to give everything for it to work. It will even strip away fake clients who only bought from you as a favour or because they are family or friends. They will begin to question the value that you sell and when they do not see it they will pull away.

All the stripping away leaves the vision bearer in a wilderness. All alone, tired, exhausted and burnt out with very little results to show for it. It is at this point that the vision bearer will begin to ask themselves tough questions about why they are really doing what they are doing. Was it for the money? Was it for change? Was it for all the above? Those with ill intention will either quit or resort to underhand dealings. Those with pure intentions, to create sustainable change, will affirm themselves with powerful answers that go beyond money making. They will remember the reason why and they will examine their hearts and realize that it was not just for the money. At this point, the Powerful vision will look down at the vision bearer and say “You are now ready to carry the powerful vision forward; your heart is in the right place”. At this point the vision only leaves room for true believers. And true believers set the foundation for greatness.

The powerful vision will open up the vision bearers mind to innovative ideas, creative solutions, new resources, new ideas for products and services, new markets that they had previously not seen. The powerful vision will enable the vision bearer to establish clarity and focus and know exactly what is required to take the vision forward, even if at this point the money is not streaming in bucket-loads yet. You the vision bearer will be energized, not by the big results but by the steady and consistent progress you make and the few believers that cheer you on. New clients, new partners, new employees, new suppliers, new stakeholders all aligned to the vision and the bearer’s values will be attracted slowly but surely. The wheel will begin to turn and results will begin to stream in. First a trickle, then a steam, then a river and eventually a waterfall. The vision will take off so powerfully at some point that the vision bearer will have to run to keep up with it. It will be like riding a bull that is charging forward without any prompting. First a small locality will feel the power of the vision, then it will be felt in the next village, then in the district and it will keep growing. The more powerful it is the more it is likely to reach far and wide, sometimes touching far corners of the world. Some are so powerful that they out live the vision bearer and grow even more after they leave us. At this point, the Powerful Vision will reward the vision bearer with much more than they had ever dreamed of. Money, satisfaction, recognition and a legacy. But most of all a refined character and a feeling of security in who they are and not what they have. They will not need to show off to others or be arrogant. Be prepared at this point for the unbelievers and cheerleaders to return, singing your praises and taking credit for getting you there.

All because the vision bearer was the only one sensitive enough to realize that something was very wrong with the world as it is today, and were willing to pay the price to give their lives to something that was going to change the world as it is. Because what we have today is the powerful vision of a vision bearer in the ancient days, and what we will have tomorrow will be the result of some powerful vision bearers of today.

Are you a vision bearer or living in the vision of another long gone? The lack of vision bearers today leaves us at the mercy of the greedy, negligent or archaic thinkers. Step forward oh you vision bearer!

Finding your place in this (entrepreneurial) world

 

“How do I know that I am doing the right thing?”

This one is long but bear with me, it could change your life.

The entrepreneur is always faced with many questions and choices that make us think a lot. In fact I don’t know of any group of people in the world who think more than entrepreneurs. We are always thinking about our businesses. We wake up with a start at night with an answer to a question that had been disturbing us all week. We get ideas about what to do next when stuck in traffic and jot it down in our ideas notebook that is tattered and full of ideas, many of them not implemented because we are waiting to get the elusive money to put them in place. However, one question that bugs many entrepreneurs especially in the early stages is determining whether they are in the right kind of business or not.

Interestingly, knowing whether you are in the right business or doing the right thing at the moment is something that will continue to nag you for most of the journey. Usually, when things are going really well like when you just got that client you have been chasing for 2 years,when you get recognized in the media, when you receive an award or when a client mentions how your work has changed their lives, you feel at home, you feel like this is what you were created for. You feel ALIVE!

But then there is the flipside. There is that time when you disappoint a key client or when you lose a client account that pays half your bills, or when you are at a contract signing stage  of your biggest deal and the client pulls out citing policy changes at head office.It can also be when that pivotal employee leaves, or in the worst case scenario, the dark days when the  3 unwanted visitors show up. The Taxman, unpaid landlord or Auctioneer. These are the days you want the ground to open up and swallow you. The days you  barely sleep and dread when morning comes. These dark days come with some of the biggest doubts you have had about your abilities and whether you were ever meant to be an entrepreneur in the first place.

If you oscillate between the dark and celebratory days several times in a month,then take heart, you are quite normal.

Over time, I have come to observe that those who seem to be in their element and who thrive possess 3 key things . These are Passion, Competence and Products/Services that meet a definite need in the market. When these 3 ingredients meet, the result can be magical,even if it takes time to come to pass. It doesnt work for all,some success stories fall outside the 3 ingredients but this can help you think through your own journey and possibly point out where the frustrations could be coming from.

Passion is when your heart beats for what you do. You have an emotional connection and you think about it all the time.You have a big dream for it and always picture yourself in the future having made a difference when it all works out. You would do it for free, only that reality requires that you do get paid. Without passion, you will not survive the hard and harsh times .  You will not commit to excellence and once money comes in and  you will lose interest  becoming just another player in the market making money but no impact to the society and industry. Passion makes you go the extra mile in all manner of ways.Be it to please clients,innovate or make amends when things go wrong. Passion will even cover for lack of competence sometimes and drive you to acquire it. This one is perhaps the most important.

Competence is either professional training,talent or extensive experience in the field that your company is operating in. You understand the technicalities behind your products or services. You research extensively about it. Maybe you have gone to school for it and understand how things work in the background .You can explain the deep concepts but can also break it down to be simple enough for your grandmother to understand. Without competence, you will be at the mercy of your technically adept employees especially when you are too broke to keep them for long before they find better paying alternatives. You will also find it hard to give strategic direction and drive your teams to be innovative. You can acquire it over time but the faster you do so the better. Those with large amounts of capital are able to buy talent easier since they can afford it but those who don’t need to incentivise their technicians creatively. Others partner with a technician and complement each other.If you are not competent, try in every way possible whether formally or informally to build it. You can read books and magazines. You can join your technical employees on assignments to learn what goes on. You don’t necessarily need to be the best at doing it but you need to know and understand what goes on. Don’t take vague explanations from your team.

Market need means there is more demand than supply and you have an angle that guarantees you will do it better than everyone else, or at least differently enough to capture a section of the market that hates current alternatives. Many people run companies that have products or services that look good on the outside but the market doesn’t really care for. They simply dont need it or want it,they are happy with the status quo until you convince them otherwise. These entrepreneurs  live in a fantasy world where they believe that since they think its important then everyone else should. Clients vote for a business only with their money, not their mouths or empty praises and promises.Listen to the customer and give them what they need. It will save you time and make you a lot of money in future. Dont necessarily buy the Steve Jobs theory that the market doesnt know what it wants. To get to that level you need to have a very deep understanding of the market to anticipate what they need. For now, listen to them and start with where they are

Get to your area of highest potential. It will propel you forward.