Still, I have Faith in the Kenyan Enterprise Story

This week I have had mixed feelings about a subject I love most  entrepreneurship. And more so, about Kenyan startups and enterprises.

After a short period of mourning one of the major brands I have celebrated over and over because of their ingenuity, I got some really glad news about three of our brands, two of them home grown that won major awards at the World Tourism Awards. Kenya Airways, our national flag carrier, was voted as the top airline brand in Africa for the second straight year. It beat South Africa Airlines, Rwanda Air and the likes. Maasai Mara Game Reserve, the eighth wonder of the world, was voted the best in the national parks category beating Kruger National Park (South Africa) and the Namibian National Park. Sarova Hotels and Lodges, our premier tourist hotel chain, also won top awards in the hotels category in the continent.

But that is not news. Nakumatt was the biggest surprise of them all. After a prolonged period of negative publicity due to dwindling business fortunes, there was some good news  they have started restocking their stores again! To those who are not up to speed with the goings on in Nakumatt, the retail mart chain has been having it rough in the last 24 or so months. Faced with growing debt and a strain on their working capital reserves, the supermarket chose to start rolling out of the markets they had entered. They first closed the Ugandan store and later on, followed up with their Thika Road Mall (TRM), NextGen Mall and Westgate Mall stores. Last week, their landlords, the Junction Mall in Nairobi threatened to close their shop due to reduced traffic. One more in Nairobis Industrial Are and another in Mombasa too have gone down too. People have been avoiding going to their stores for lack of sufficient supplies despite their we need it, we’ve got it brand tagline.

 It was therefore a sad thing to see the mighty bronze elephant statues being dismounted from the entrances of their stores as the giant slowly fell. 

But the story of Nakumatt is reminiscent of the Kenyan entrepreneurship story. An entrepreneur comes up with a great concept, works his way to make it established like a colossus. But the problem starts to arise when the firm reaches its maturity stage and the growth either stagnates and declines or continues to rise and forms its Achilles heel. The latter is what happened to Nakumatt. Nakumatts rise has been anything but phenomenal. In a few years from being a small backstreet store, it established its footprint all across the region. As at the beginning of the year, it has slightly more than 60 stores across Kenya and Uganda. With increased stores and pressure to deliver to its clients, Nakumatt relied heavily on suppliers credit to meet the demand. With no cash to pay for its supplies, it resorted to extend its debtor days from the standard 60 days to more than twice that number 120. But what even made things worse was a strategic decision by the Nakumatt management to start producing their products under the famous Blue Label brand. In this case, it approached producers of various products and bought in bulk to resell to its customers, undercutting its suppliers. The Blue Label products were even more popular with consumers as they were cheaper than the conventional ones. 

However, we have to appreciate  that the Nakumatt enterprise is a wholly owned family outfit. Atul Shah, the current heir, is the son of its founder. Many suitors have approached the family to invest into the firm but they have continued to hold on. As such, the working capital has been provided through external borrowing and sources from within the family, which limited its operations. With a restricted cash inflow to finance operations, suppliers refused to provide more suppliers on credit since the delivered goods were not being paid for. And that is how the firm was pushed into a corner since human traffic was reduced significantly. Stories of stores with empty shelves were abound on social media and the print media, further eroding its brand position and equity. They remained with no option but roll out of the markets they had entered, further deteriorating the situation.

This therefore means the cookie started crumbling when the owners of the firm refused to adjust to the demands of the business in terms of capital. A business that grows demands a huge outlay of capital and when the owners are restricted, it ultimately collapses. Most startups are started with an all- mine mindset by the owners. They start businesses with an intention of being the sole beneficiaries of returns and hence choke it up in the fullness of time since growth is stifled for lack of capital. What we need to appreciate is the fact that a business is like an asset. No asset is held for good. There must be an exit strategy sooner or later in the course of time. The owners must be ready to cede part of the shareholding and ownership in exchange of additional resources (financial or knowledge) to help their vision advance to even bigger proportions. 

As the founder, you will still remain the originator of the business idea and the vision carrier. But moving the business from its nascent stages to maturity would demand that you leverage networks and resources. And this is where the call for additional shareholding is most welcome. It is time we learnt from firms founded in the West. Facebook, Google, Apple and the likes, were started off by one or two people who came together. With time, they needed additional resources to grow and as such, they had to cede control of their firms in exchange for additional resources that have made them the conglomerates we know them to be, today. It pays to know when the time is ripe for an exit in any undertaking.

Nakumatt was approached by investors interested in injecting additional cash but they chose to cling onto their baby. Now they are struggling. It is my hope that they would indeed heed to the needs of the business and give in, for the preservation of this important national success story. And I do believe that other startups would learn this lesson and follow suit. This is why I still have hope for the Kenyan Enterprise, that indeed we will thrive!This week I have had mixed feelings about a subject I love most  entrepreneurship. And more so, about Kenyan startups and enterprises.

After a short period of mourning one of the major brands I have celebrated over and over because of their ingenuity, I got some really glad news about three of our brands, two of them home grown that won major awards at the World Tourism Awards. Kenya Airways, our national flag carrier, was voted as the top airline brand in Africa for the second straight year. It beat South Africa Airlines, Rwanda Air and the likes. Maasai Mara Game Reserve, the eighth wonder of the world, was voted the best in the national parks category beating Kruger National Park (South Africa) and the Namibian National Park. Sarova Hotels and Lodges, our premier tourist hotel chain, also won top awards in the hotels category in the continent.

But that is not news. Nakumatt was the surprise of them all. After a prolonged period of negative publicity due to dwindling business fortunes, there was some good news  they have started restocking their stores again! To those who are not up to speed with the goings on in Nakumatt, the retail mart chain has been having it rough in the last 24 or so months. Faced with growing debt and a strain on their working capital reserves, the supermarket chose to start rolling out of the markets they had entered. They first closed the Ugandan store and later on, followed up with their Thika Road Mall (TRM), NextGen Mall and Westgate Mall stores. Last week, their landlords, the Junction Mall in Nairobi threatened to close their shop due to reduced traffic. One more in Nairobis Industrial Are and another in Mombasa too have gone down too. People have been avoiding going to their stores for lack of sufficient supplies despite their we need it, weve got it brand tagline. It was therefore a sad thing to see the mighty bronze elephant statues being dismounted from the entrances of their stores as the giant slowly fell. 

But the story of Nakumatt is reminiscent of the Kenyan entrepreneurship story. An entrepreneur comes up with a great concept, works his way to make it established like a colossus. But the problem starts to arise when the firm reaches its maturity stage and the growth either stagnates and declines or continues to rise and forms its Achilles heel. The latter is what happened to Nakumatt. Nakumatts rise has been anything but phenomenal. In a few years from being a small backstreet store, it established its footprint all across the region. As at the beginning of the year, it has slightly more than 60 stores across Kenya and Uganda. With increased stores and pressure to deliver to its clients, Nakumatt relied heavily on suppliers credit to meet the demand. With no cash to pay for its supplies, it resorted to extend its debtor days from the standard 60 days to more than twice that number 120. But what even made things worse was a strategic decision by the Nakumatt management to start producing their products under the famous Blue Label brand. In this case, it approached producers of various products and bought in bulk to resell to its customers, undercutting its suppliers. The Blue Label products were even more popular with consumers as they were cheaper than the conventional ones. 

However, cognizance has to be taken into consideration that the Nakumatt enterprise is a wholly owned family outfit. Atul Shah, the current heir, is the son of its founder. Many suitors have approached the family to invest into the firm but they have continued to hold on. As such, the working capital has been provided through external borrowing and sources from within the family, which limited its operations. With a restricted cash inflow to finance operations, suppliers refused to provide more suppliers on credit since the delivered goods were not being paid for. And that is how the firm was pushed into a corner since human traffic was reduced significantly. Stories of stores with empty shelves were abound on social media and the print media, further eroding its brand position and equity. They remained with no option but roll out of the markets they had entered, further deteriorating the situation.

This therefore means the cookie started crumbling when the owners of the firm refused to adjust to the demands of the business in terms of capital. A business that grows demands a huge outlay of capital and when the owners are restricted, it ultimately collapses. Most startups are started with an all- mine mindset by the owners. They start businesses with an intention of being the sole beneficiaries of returns and hence choke it up in the fullness of time since growth is stifled for lack of capital. What we need to appreciate is the fact that a business is like an asset. No asset is held for good. There must be an exit strategy sooner or later in the course of time. The owners must be ready to cede part of the shareholding and ownership in exchange of additional resources (financial or knowledge) to help their vision advance to even bigger proportions. 

As the founder, you will still remain the originator of the business idea and the vision carrier. But moving the business from its nascent stages to maturity would demand that you leverage networks and resources. And this is where the call for additional shareholding is most welcome. It is time we learnt from firms founded in the West. Facebook, Google, Apple and the likes, were started off by one or two people who came together. With time, they needed additional resources to grow and as such, they had to cede control of their firms in exchange for additional resources that have made them the conglomerates we know them to be, today. It pays to know when the time is ripe for an exit in any undertaking.

Nakumatt was approached by investors interested in injecting additional cash but they chose to cling onto their baby. Now they are struggling. It is my hope that they would indeed heed to the needs of the business and give in, for the preservation of this important national success story. And I do believe that other startups would learn this lesson and follow suit. This is why I still have hope for the Kenyan Enterprise, that indeed we will thrive!

             ***** Ends******

The writer is an acclaimed business author of Passionpreneurship Demystified and Business Networking: How to maximize on your contacts for Business and Professional Growth. Both books are available on Amazon. He is also a Personal Branding and Business Speaker with PBL Africa and a Cytonn eHub Mentor. In case you need assistance to give your business or profession a jump-start, he can be reached via the following contacts:

Email:                pblogix@gmail.com

LinkedIn:             https://www.linkedin.com/in/mike-okinda-9652b210a

Telegram:             @Mokinda

Telegram Community:      https://t.me/joinchat/EkprBT6zCKCRUmQUaDD9cQ

 

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The Power of WHY

Airtel posts a Kes. 45B loss for the last financial year. Safaricom, its main competitor in the same market, posts a reverse figure โ€“ Kes. 48B profit. Airtel, originally known as Kencell Kenya, was the pioneer mobile telephony operator in the country. Safaricom started later on, and experienced a myriad of customer service issues due to its technological challenges with its infrastructure. Give it to the then association with the then parent company, Kenya Posts and Telecommunication Corporation, a government parastatal.

But then, how comes the originator of the mobile telephony concept was beaten to the game? It behooves us to keenly look at the business models of the two antagonists and you will discover a deeper and much engrained secret: Values.

Safaricom started off as an enabler of communication with its โ€œGet Connectedโ€ brand proposition. It enabled even the marginalized then to connect with each other and endeared itself with the rural poor and unreached. The competitor, showed itself to be elitist โ€“ marketing itself as an urban brand and only concentrated itself to its urban target market. It was considered expensive. However, the network quality was superior.

Then came the game changer โ€“ Mpesa. As we speak, Safaricom has transformed itself from a principally mobile telephony company to a cross sectorial aggregator to currently, a digital enabler incorporating data and other services on its platforms. Itโ€™s purely a hegemony! 

Airtel tried to catch up with its Zap service but Kenyans wouldnโ€™t accept the brand. To them, Mpesa, especially after the 2007/2008 PEV crisis, proved to be a much more reliable and homely service than Zap. Mind you Zap even waived off all fees! Airtel, since its inception, has seen changes in its leadership with nine CEOs taking charge. For Safaricom, as a show of its stability, has only had one transition in its top leadership.

That is the power of a brand. If you really want to make it in business, learn your target market. Aligning your value system to the target marketโ€™s ethos and you will be good to go! Apple is the way it is not because it is cheaper, but because its users find it easy and amiable. Safaricom too, is running on this same platform of values. It all boils down to your WHY.

                   ****END****

The writer is an acclaimed business author of Passionpreneurship Demystified and Business Networking: How to maximize on your contacts for Business and Professional GrowthBoth books are available on Amazon. He is also a Personal Branding and Business Coach with PBL Africa. In case you need assistance to give your business or profession a jump-start, he can be reached via the following contacts:

Email:                pblogix@gmail.com

LinkedIn:             https://www.linkedin.com/in/mike-okinda-9652b210a

Telegram:             @Mokinda

Telegram Community:      https://t.me/joinchat/EkprBT6zCKCRUmQUaDD9cQ

Monkey See, Monkey Do Syndrome

When i heard of this idiom, i never actually appreciated what it  implied. Actually it holds much water for us who are still growing and finding our footing in life.

So the story goes that a group of pupils organised for a trip to a zoo and on the way, they each bought hats. When they arrived at the zoo, they were amazed at the different animals on display. One stand fascinated them – monkeys upon a tree. And they were so engrossed at enjoying their presence with them that a slight wind came and blew away their hats which the monkeys grabbed. They wore them on their heads just as they saw the kids do!

The kids got mad. They beckoned to the monkeys to go to where they were and the monkeys did exactly that. Whenever they did anything in an attempt to get their hats, the monkeys did the same. They realized there was a way to trick the monkeys, by making them ape them: they took their scarfs and tied them on their heads to look like hats. The monkeys did not copy that since the way they looked was alike to them – as if they wore hats. Then in tandem, they removed the scarfs from their heads and threw them into the air. The foolish monkeys, as was their character, did the same and pulled the hats from their heads and threw them into the air. The hats flew down to the ground and the kids took them back and ran away, laughing in joy.
Funny as the story is, it holds great lessons for us and is a clear mirage of how most of us live. How many of us have a clear vision of what we want in life? It is said almost 92% of people in the world today die before realizing their potential in life. It is therefore not a surprise that the richest place in the world is the graveyard as in it lies ideas that were never fulfilled.

I know of friends who purpose to do stuff but along the way, out of external pressure, they bulge and start aping their fellow men’s ideas. Of particular instance is  a pal whose passion was doing marketing. When a fellow came into town and he held an event, he chose to shift to doing events management. Well, he organised his and it never went down well. He lost a lot of cash and when i met him, he chose to go into environmental consultancy, saying that that was his forte. Well, i just sat back and analysed his adventure at self discovery and i pitied him. I have never heard of him since.

Like the monkeys in our analogy above, many of us never have confidence in what we put our minds to do, and get derailed when challenges come in. We are uniquely created with individual and specific strengths that make us to be who we are. No two people can therefore do the same thing likewise. If i was to write down my speech, and gave it to you to go present at a conference, trust me you would not deliver it as perfectly as i would even without the write up. Because we are totally different. That is the reason why anyone who apes fails in execution.
I always admire Thomas Edison, the great  American inventor. He tried 999 times to invent the light bulb. And every time he failed, he said he learnt one way not to do it. Were he to start letting his eyes wander off his purpose, someone else would have come along and did exactly that and take all the glory, plus the rewards!

They say the grass is always greener across the fence. But then, if you water yours, it would also be green. It is just a matter of effort and skill. Or better still, be greener and more attractive than the one across the fence. So, why cross the fence? Tend to yours!

 It is time we stopped seeing what people do and ape and start living our lives as we were created to, in business and in the workplace. You can only be the best version of yourself and not the other person! If you want to have a fulfilling business or work quality, just choose to be the best you can be of yourself. Because it is your passion that would power your life dream!

The writer is an acclaimed business author of Passionpreneurship Demystified and Business Networking: How To maximize on your contacts for Business and Professional Growth. He is also a Personal Branding and Business Coach with PBL Africa. In case you need assistance to give your business or profession a jump-start, he can be reached via the following contacts:

Email:                             pblogix@gmail.com

LinkedIn:                        https://www.linkedin.com/in/mike-okinda-9652b210a

Telegram Community: https://t.me/joinchat/EkprBT6zCKCRUmQUaDD9cQ

Facebook:                       https://www.facebook.com/maikol.okinda

SECRETS OF DOMINANT ENTERPRISES

This week, Facebook announced that they had hit 2 billion subscribers. Facebook is urguably the world’s biggest media content provider inasmuch as it does not create any content of its own! 

Uber, the world’s largest taxi hailing company, also does not own a single cab of its own. Neither is Alibaba, the biggest online retailer as far as business inventory is concerned. Airbnb follows the same fashion, with no real estate of its own, despite being the world’s largest accommodation provider. 

Coming closer home, Safaricom Kenya Limited is the biggest telco in East and Central Africa. With its profitability hitting Kes. 45 Billion ($ 442 Million) this year, the amount alone is enough to finance Kenya’s Health Ministry for an entire year, going by the country’s 2016/2017 budget. 

However, Safaricom is not known for being a communication company alone. Its flagship product is MPesa, a mobile wallet value addition which enables subscribers to undertake financial transactions. Banks have in effect, rode on the platform to offer lending products. So far, it is estimated that over 27 million Kenyans are subscribers of this mobile money service making Safaricom to be Kenya’s and East Africa’s biggest bank, quite literally! Mark you it does not own a single brick and mortar vault! 

Peter Drucker, the infamous management guru, said that the main function of business is marketing and innovation. This therefore implies that the main purpose of enterprise is to create customers. And hence, it follows that a successful business is only one if it creates and builds its customer base. It is therefore be logical to conclude that a business’ growth is only measured by the number of its clientele. 
This is the secret that has alluded many  businesses that exist in this day and age. Most startups are established to churn out revenues and monetary payouts to their owners. But then, it also explains why a huge percentage of startups fail – due to lack of focus on growing customers. Jim Collins, another guru in management, postulated the Hedgehog concept in which passion, ability to perform and cash cows are factored to create dominance by a firm in a sector. A firm can never generate sustainable cash flows unless it has the numbers in terms of customer numbers. If you study all dominating firms, they have invested heavily on acquiring and maintaining their customers to realise the returns they have.

It therefore calls for the entrepreneur to study his intended clientele well enough to keep up with their tastes and preferences and in addition, changes if any. Firms that withstand the test of time are those that are able to mutate in tandem with the changes in their market niches. This is exactly what cost Kodak and Nokia brands  – rigidity in their product innovation in conformity to customer tastes. New entities came, adopted to the client preferences and took over their markets. 

It again demands that the core corporate values of a business entity have to be in tandem with values of the populations they target. Safaricom Kenya Limited, as mentioned, was not the pioneer telco in Kenya. Kencell was. It later changed ownership and became Zain and currently is branded Airtel. However, despite being the pioneer mobile telecommunications company in the country, it is still struggling to capture the majority share of the available market. Safaricom commands slightly more than 70% market share thanks to its Mpesa value addition on its service. Mark you it is not the cheapest hence the price factor is out of question!

Now for one to understand Mpesa, one has to appreciate the culture of the Kenyan people. Kenyans are a closely knit society which values sharing and blood relationships. As such, more able members of the family travel out in search of job opportunities and whenever they land a job, they would remit some of their earnings to their homes as a way to assist others. This sharing philosophy is what Mpesa was built on – to remit funds, albeit in small quantities. At the time of its launch, most banks had locked out most of the population by their stringent account opening conditions. For one to subscribe to Mpesa, one just needed an ID and a Safaricom line. And that is how the revolution started in 2007 with the launch of the service. Through MPesa, Kenyans could send cash, buy airtime, pay for goods, even borrow on short term basis through the click of their button. And that is how Safaricom wormed its way into the hearts of Kenyans, and assured its place into the Kenyan culture. Its value tag was “Get connected”, in consonance with the social connectedness of the Kenyan people.

Well, do you desire your business to live beyond you and post better returns? Then you have to think about your value system and match it to your clients’. That way, like Safaricom, Facebook and all the others mentioned, you will be assured of longevity of business. 

Customers feel their needs are met by firms whose values fulfil their needs. It is upon the business to craft its strategies around values that will give the potential clients assurance that their needs and preferences would be fully met. That way, one is guaranteed long term loyalty and growth. 
The writer is an acclaimed business author of Passionpreneurship Demystified and Business Networking: How To maximize on your contacts for Business and Professional Growth. He is also a Personal Branding and Business Coach with PBL Africa. In case you need assistance to give your business or profession a jump-start, he can be reached via the following contacts:

Email:                             pblogix@gmail.com

LinkedIn:                        https://www.linkedin.com/in/mike-okinda-9652b210a

Telegram Community: https://t.me/joinchat/EkprBT6zCKCRUmQUaDD9cQ

Facebook:                       https://www.facebook.com/maikol.okinda

Why That Business Plan May Prove Useless for Your Startup.

It is the norm for any business advisor speaking to newbies starting on the journey of entrepreneurship, to suggest that they start their business by doing a business plan. In fact, for many financial institutions, this is a core requirement for financing. But then, do business plans really work?
We have to accept that natural law of success: failing to plan is automatically the recipe to fail. Hence, failing to plan is planning to fail, so goes the adage. It therefore goes that planning in itself is a critical component in starting out as a business. It just cannot be wished away. Studies done to evaluate the relationship of business planning and success rate of the same give a direct correlation between the success of business and planning. This has been the theory that has been peddled all along by conservative business trainers, coaches and tutors.

But doing a business plan in itself is tedious. It requires input of many hours and abstract thinking, of where the entrepreneur needs to see his business in the foreseeable future. in actual sense, for one to do a practically applicable business plan, it would require technical expertise and this is not only discouraging, but expensive in the course of time. Its implementation too is another issue altogether. Business plans are rigid and structured that are almost always not flexible to the constantly changing conditions on the ground. This in effect implies that the conditions at the time of formulation of the entire plan are not guaranteed to be similar at the time of implementation. 

Business markets change almost on an hourly basis and hence, relying on a plan drawn up in the past for the present situation would almost always result into failure. Hence a fluid, more adaptable system of business planning especially for startups is needed. Its implementation is even hampered by its cumbersomeness. No plan is less than a page and hence it requires that one has to ruffle through the numerous sheets of paper to get a point. 

Faced with these challenges, Alexander Oxerwalder developed a simpler, fluid and highly adaptable business planning tool, which he aptly named the business model canvas. The model was planar and hence visualization of the business was simpler and less tasking as opposed to the conventional business plan. 

The model has nine critical components: value proposition, key activities, channels, customer segments, customer relationships, revenue streams, key resources, key partnerships and cost structures. It defines clearly and in a diagrammatic, planar form, how a business is going to create value for its target clients, what activities it will involve itself in in achieving this, how it will deliver this value and through which means, what strategic partners it would create linkages with, cost factors associated with its activities for maximum revenues, in a simple structure. 

It is aptly called a model because it is fashioned to adapt to the conditions on the ground. Hence, if the cost factors change, or the taste and preferences of the target market niche change, the model is adjusted to ensure that the maximum returns are obtained at the tail end. It therefore ensures the concerns of the business stakeholders are taken care of at all times.

The Business Model Canvas (Picture: Courtesy)

On the contrary, a business plan cannot adapt to conditions on the ground. Therefore, any shift destabilizes the entire plan and hence, it is considered rigid. The business model canvas is based on experiential operationalization and hence, concepts and theories are tested before full implementation. Ideas are tested using the model. For the plan, this is not possible. The input to output process flow is fixated on the process major, with the theorized output quality and quantity realized at the terminal end of the entire process chain. The thought process is also exclusively applied on paper rather than testing on the ground.

The business model canvas also is more result oriented with a special emphasis on the how to component of achieving results and returns to the shareholder. The business plan is deficient on this. It only dwells on the final result or outcomes rather on the techniques and strategies to attain that. On another front, the business model canvas is more visual. As said before, it is planar as opposed to the business plan which is voluminous and made of several pages.  It is more of hypothesis and theory than being practical. Hence, it is nearly impossible to visualize the business from the initial stage of idea conceptualization, through to implementation and finally, delivery of the final product to the desired market. The business plan therefore falls short in representing the business as a vision which the business model perfectly does.

Startups in their humble beginnings require fluid and agile tools that would perfectly fit into the business system and enable the outfit adopt to the ever changing business external environment. A business plan would not be able. It is a known fact  most who draw up business plans eventually discard them since their implementation is near improbable. If you are currently operating a young enterprise, or in the threshold of starting one, it is time you change with the times and draw up a business model canvas. That is assured to work out fine!
The writer is an acclaimed business author of Passionpreneurship Demystified and Business Networking: How To maximize on your contacts for Business and Professional Growth. He is also a Personal Branding and Business Coach with PBL Africa. In case you need assistance to give your business or professional a jump-start, he can be reached via the following contacts:

Email:                             pblogix@gmail.com

LinkedIn:                        https://www.linkedin.com/in/mike-okinda-9652b210a

Telegram Community: https://t.me/joinchat/EkprBT6zCKCRUmQUaDD9cQ

Facebook:                       https://www.facebook.com/maikol.okinda