Thursday, July 16, 2015

On Startups; From Ideation To Exit...MWF Chronicles V

This week we had what I will term as the most thought provoking session for me. KP Reddy, and amazing serial entrepreneur was invited by Duncan, one of the faculty to give a presentation on startups. He started his first business at age 19 and by 27 he had grown his startup to a publicly listed company. At this point, he handed over the reigns and took off 3 years. In this time, he was growing his own food and doing yoga everyday (Yes, seriously) 

Currently, the techie turned investor and speaker is highly sought after due to his candid counsel to both startups and Fortune 1000 companies alike, he has been requested by organizations such as IBM, Coca-Cola, UPS, Cox Communications and Autodesk. K.P. has spoken at universities all over the U.S. including: Harvard, Georgia Institute of Technology, Vanderbilt, Stanford, Emory, San Jose State, University of South Carolina, and Cleveland State.

Innovative and witty, K.P. speaks to leaders with intriguing topics such as: Your Culture Sucks Because You Suck, Why Big Companies Can’t Innovate, Disruption Is Not A Marketing Campaign, Why You’re Not a CEO, Yet… and Why Every Recent Grad Should Work at a Startup.

In 2012, K.P. published BIM for Building Owners and Developers, a book on the adoption of advanced technology in the infrastructure space employed by leading companies and universities.

K.P. is also startup Catalyst, helping organizations accelerate through coaching and programs such as: Startup Weekend, Customer Discovery Classes, Accelerators and Hackathons. These can range from one day to six week cohorts, depending on your needs and timeline.

From this session, I was able to see clearly what I’m doing right but most importantly , what I’m doing wrong and how I can start to correct it. I wished that my co-founders and all the startup founders from my eco-system were there. There were so many take-aways and here’s a few of the gold nuggets that K.P shared ;

1.Be an expert in a field of study. Find something that you are really good at and become king at it. Whether it is a particular form of technology, marketing or finance subject. For example, you should be able to say something like, “I’m among the top 5 experts in cryptocurrency transfer services among the unbanked in sub-Saharan Africa.” For you to achieve this, it means you have to dedicate an insane amount of time to reading and research. You should achieve top of mind status for your field.

2.Don’t rush and quit the day job; Learn new skills first to de-risk yourself. Secondly, learn about the market you want to enter to de-risk the business. You have to be realistic based on the experience you have, because this is what drives results. DO NOT QUIT UNTIL YOU HAVE A PLAN.

3.Build your equity; Ideas are a dime a dozen, they do not matter. You cannot base your equity on an idea. What matters is deliverables. What have you done with your idea? Have you documented your work? Before you go out hunting for investors, have you done your own due diligence? If any mistakes are to be made, make these on your own dime. Realize that some ‘founder’ have unfair advantage, be it a degree (and hence connections) from Stanford or celebrity status. Find a unique way to compete.

4.Capital; Capital is not to be used for founder salaries or exploration of business models. Capital is essentially meant to be used to build production platforms and to scale sales teams that a utilizing a proven methodology. Do not raise capital to a “dead end.” You must always know how much total capital is needed to execute on your plan. Your gross margin must be able to support your cost of capital. For early stage investment, you need to have revenue to validate the customer need. Think of capital as a highly structured supply chain.

5.Start with the exit in mind. This was my biggest takeaway. I am essentially building a business to handover to my children and all this talk of exits that is trending has had me worried for a while. I do not want to sweat blood and tears all for some guy in a suit to come and slap a value to my work and walk away with it.I expressed this to Reddy and he allayed my fears. An exit doesn’t always mean selling your company off to some huge corporate investor. An exit strategy can be handing over to the next generation. Do not build a company around yourself. It should be able to exist successfully in your absence. This for me was key because most successful businesses in Uganda collapse soon after the death of the founder. And it is because of this very reason, not having the end in mind so there is no business continuity plan set up. I am glad that he emphasized that we should always be cognizant of this fact.

I got such deep insight for my startup and I can’t wait to get back home and start implementing what I learnt.

Friday, July 10, 2015

Experiential Learning - UPS...MWF Chronicles IV

Yesterday, we spent the day visiting UPS on location for an immersion session on how the company actually runs. We had presentations from the staff on a wide range of topics; from their history, how the company engages with government, their emerging markets strategy and their digital social media strategy. The company was founded 108 years ago by Jim Casey, an Irish immigrant raised by a single mom. It grew astronomically from just 4 employees and 2 bicycles to a multinational operation of over 400,000 employees with an aircraft fleet of 221. We were told that the key element of this success was the company culture that the founders were really committed to and took time to embed in their day to day lives and operations.  Believing in people, delegating power, integrity and sharing financial success are all key elements of this culture. They are evidently living this even today. Most of the people we spoke to have worked at UPS for no less than 30 years. THIRTY! It's remarkable.

The most intriguing session for me was the operational technology session. The technology they utilize and how it has evolved was mind-blowing. They have been utilizing big data for years, long before we started calling it "big data"! It is amazing to see the use of it and how it's helping them make millions in savings. From basic things such as reducing the waiting time of drivers and making decisions on things like whether the driver should leave the engine running or not. For example, they saved $14,6m for every minute they did not waste in 2014. Their ORION (On-Road Integrated Optimization & Navigation) builds the foundation of UPS' rich technology. They do not have a patent for it because it is a trade secret just like the Coca-cola recipe. We were not allowed to take pictures and they do not have Wi-Fi access for guests. All part of securing their data.
I asked Chuck Holland,the head of operational technology what their approach was towards startups that are disrupting their industry such as Uber that has just recently announced that it will procure most of Tesla's autonomous vehicle in the near future. They may not be legislated yet but that won't remain so for very long. And while UPS is using Orion to optimize the role of their drivers, Uber is going to eliminate the role of the driver. His answer, they are watching this space keenly but will jump into it with caution.

This experience has so far made me acutely aware of how disruptive certain technology and startups are. Operating with leaner, meaner models and rendering old institutions redundant. Take Kodak for example, having over 17,000 employees, it filed for bankruptcy in 2012. The year that Instagram, a photo sharing app with only 13 employees was acquired by Facebook for $1 billion. Times have changed. Emphasis is not on content creation anymore but context creation. But this change is not just here in America. Iroko, a Nigerian startup is spreading like wildfire streaming local African content via web and mobile. I am certain very few local stations think of it as competition or even at all. And this is the sad thing about us, this change is going to catch most companies unaware. Yet they could have set up tech strategy departments to keep abreast of such changes and devise means to keep up.  Data is getting cheaper. Devices are getting cheaper. One can now get a 4G enabled tablet at less than $40. If you a run a company (in any field, even agriculture) add informing yourself on technology as part of of your job description. Thank me later.

"Run your business from your heart AND from your head." - Stan Deans, President- Logistics                                                                                                                &Distribution,UPS

Wednesday, July 8, 2015

Africa,Let's Get High Off Our Own Supply...MWF Chronicles III

A recent research survey, conducted by UK-based business-networking group, Approved Index, ranked Uganda as first in the world for having the most entrepreneurs per capita. This is shocking because for a country that has the highest number of entrepreneurs in the world, we have one of the weakest economies in the world albeit having had a more or less stable political situation for the past 29 years. Right now the shilling is plummeting to the ground, I left the country when it was trading at 3200 against the dollar. It is now breaching the 3500 mark! All in a manner of weeks. The Central Bank Governor has come out to say that there should be no reactionary interventions to be expected from them anymore so essentially, we're on our own. We are screwed. Woe unto you if you earn in shillings.

But this should not be. It makes no sense at all. Uganda has substantial natural resources; fertile soils, regular rainfall, deposits of copper, gold, and other minerals, and recently discovered oil. We are populous; with a growth rate of 3.03% and a population size of 35 million that is expected to reach 47 million in 2025. And finally, we are young. More than half of the population is under 15. This is a recipe for success. We should be the production and consumption capital of the world. Alas, we are not. Production at least. But we are heavily competing for that consumption title. Last year, we imported $5.71B worth of goods and exported a measly $2.68B.  What did we import you may ask. Fuel(21%), Medicine (3.8%), Palm oil (3.6%), TV's (3.1%). TV's?! Yes, really. I double checked. We spent $0.17B on TV's. What is wrong with us? And these are the top 5 imports. We import everything from toilet paper to hoes. For a country whose backbone is agriculture, the bare minimum  we should be doing is making these hoes already dammit!  At the very least but no, we want to get hoes from China. 

The only way that our economy will be resuscitated is if we start to produce. So I asked myself, why don't we produce? Why aren't more Ugandans throwing themselves into manufacturing. We are after all the most entrepreneurial people on the planet and there is clearly a gap. Then I remembered my own foray into manufacturing. A while back, I debuted a line of onesies. Made from 100% organic cotton grown here in Uganda and tailored in Ugandan. It was a flop. Not because people didnot like the designs, they loved them. Not because of the quality (100% cotton, perfect for babies) but essentially because they were made here. I had to remove the tags that had the label made in Uganda for the sales of that line to pick up. And I went back to selling the onesies imported from China after that because it made business sense. They were cheaper to source and even though they were of a poorer quality (only 80% cotton) and priced at the same price as the ones made in Uganda, they flew off the shelves. But what is it about us that makes us not want to buy our own. Why do we think things made by people just like us are not good enough. Because this means that indirectly we think we ourselves are not good enough. What is this self-hate? I need someone to explain it to me.

This past weekend, I was privileged to volunteer at the peach tree marathon here in Atlanta. It is the largest 10k marathon in the world attracting over 60,000 participants. It is held on the 4th of July and it was a sight to behold. The most intriguing thing about it, was the participants. Young , old, pregnant everyone character you can imagine was there. I saw a couple dressed up in silver body paint to celebrate 25 years of marriage! But what struck me most was the love Americans have for their country. It was raining cats and dogs but everyone turned up, running in their flag themed outfits. The 4th is celebrated like Christmas. These people revere their country.

Must take photo at every event. LOL.

I am ashamed to say that I have never owned a Ugandan flag prior to having to come for the Mandela Washington Fellowship. And yet I claim to be an avid lover of my country! My love is a lie. Here I was surrounded by the American flag in all forms and sizes; shorts, dresses, hats, body paint. Every house that we went passed had the flag raised outside. Here were people who truly,madly and deeply love their nation.  And then it hit me, this is why the economy of the U.S is strong and now China and India are following suit. What is unique about them is that even before they export, they have a large home based market for their produce. Simple as that. This is what we lack. We are busy looking to export instead of starting to first consume what we produce ourselves. How do we expect people to consume things that we ourselves do not? If we want to scale our economies,this must change. And this must change for every single African country. I have been asked by several people if I'm looking to set up shop here in Atlanta. My answer has been and remains a firm NO. Until I am done spreading the gospel of Zimba Women to the 1 billion people on my continent, I will not look elsewhere. The only way to show that we love this continent is to put our money where our mouths are.  Africa, we must get high off our own supply.