Lunch with a Guru

In the last two posts we examined ratios you need for appraising your business; the Pareto principle and efficiency ratio. This week, we’ll be taking a short break from ratios to examine an important relationship every entrepreneur must have to succeed in business. Thereafter we would return to our business ratios.

The world’s most expensive lunch is served once a year. Some years it’s a table for two, other years it’s for more; but one of the customers is a constant. His name is Warren Buffett, the second richest man in the USA. “No wonder”, you’d say until you find out that he doesn’t even pay for the meal; that honour falls on the other customer(s). Then you’ll begin wondering why on God’s green earth someone will shell out so much ($3.5million in 2013) to eat with a money-bag who won’t pick the tab.

I assure you that they don’t pay that much to have their pick of a buffet; it’s the brains of Buffett himself they are out to pick. His vast investment experience, particularly in picking winning stocks, is their sole aim and the delicacies are merely icing on the cake. They recognize that to sit, for an hour, with one so astute is worth decades of personal study and equivalent to years of hands-on experience. (It must be noted that Mr. Buffett auctions the lunch to the highest bidder and gives the proceeds to charity).

That brings us to this focus of my post….. How much are you willing to part with for mentoring? What will you give to stand on the shoulders of those who've gone ahead? How far would you go to get sound judgment? Think about it!

To start with, who is a mentor? A mentor is not an adviser, although we seek their advice; neither is a mentor a friend, although we love to have them on speed dial. A mentor doesn't micro-manage you, hold you by the hand when times are hard or give you the occasional pat on the head when you do it right. What a mentor does is to point you in the right direction. Period.

Better is the inescapable bridge to Best

       This morning, I had a 7 o’ clock meeting with a friend at my bus stop. I got there at 6.57 a.m. but he was nowhere to be found. I pulled out my earphones and slid them into my ears as I patiently waited for him. But, there was a ringing noise coming from elsewhere and disturbing the Coldplay song I was enjoying. I looked around and saw a driver shouting his bus-route to attract passengers. I shook my head. At 7.23 am, he left with ONLY TWO passengers in his 10-seater bus.

As I waited, I noticed an elderly woman sweeping the roadside; she had covered quite a stretch. I saw that she’s one of the sweepers employed by the Environmental Sanitation office. Bent over like the letter ‘n’, she was using the local broom with a short handle to do her work. I shook my head again.

I left the bus stop after my meeting and went to the cable TV office. They had sent a broadcast to several subscribers to come this morning and exchange their decoders for the new upgraded versions. I met a handful of people sitting outside the office and I joined them. A lady next to me advised the janitor to find a way of ensuring a first-come first-served basis but he dismissed her. Five minutes later, some boisterous clients arrived and headed straight for the office to swap their decoders. Some early arrivers protested, insults were traded, fists clenched and punches freely thrown. After four and a half hours, I finally got my new decoder. I shook my head one more time.

In this part of the world, we have a misconception that until an activity incorporates some form of chaos, drama, or stress it is not worthwhile. In other climes, they strive for greater efficiency in everything, but we search for more activity and end up bogged down with more motion and less movement. Will it kill the driver to place a signboard of his route on the bus? Will it annihilate the sweeper to get a long handle for her broom? Or will it exterminate the janitor to get a pen and paper for clients to write their names as they arrived? 

Paretize Your Business

For the next few weeks we shall be looking at some principles and ratios needed to optimize your business operations as well as some to check if the business is on track.

Today, we will look at the Pareto principle or the 80/20 rule and review its applications for your business. The Pareto principle is a rule of thumb underpinned by a cumbersome Mathematical law (power law). But you needn't understand the law to understand the principle; a cursory look at your surrounding is enough to prove its merits. The principle links cause and effect and is used in determining how to optimally allocate your ‘scarce’ resources. In layman’s terms, Pareto principle states that if 100 factors can cause 100 effects, about 20 of the factors will likely cause 80 of the effects. If I've succeeded in confusing you, let me un-confuse you with the following illustrations.

If you are a kindergarten teacher unlucky to have a perpetually noisy class, 80% of the noise is the handiwork of 20% of your pupils. If you are like my friend, who collects shoes like bees do pollen grains, you’ll wear 20% of the shoes on 80% of your outings. If you are a salary earner, always complaining that your take home cannot take you home, 80% of your monthly income is consumed by 20% of your expenses. And on and on it goes. Actually, the man credited with the principle postulated it when he noticed that 80% of the land in his country was owned by 20% of the population. Can you give other examples of similar phenomena in your surroundings?

Don't sue them b*stards (written in collaboration with Opemipo Owotumi)

One evening in 1994, I sat in the living room with my siblings. We had just downed a heavy dish, and the kids we were, we launched into a very excitable state. Our parents had gone out so the house filled with much animated conversation and noise followed by a lot of laughter and mirth. As all this was going on, I noticed that my younger sister stuck her left index finger in her ear and began wiggling it. After a bit, her face wore a frustrated look from not getting enough satisfaction from using the finger and her eyes began darting round the room for a better scratching tool. Like me, my sister had developed a bad habit of sticking anything thin enough into the itching ear. Mum, had often scolded us for this habit and forced us to use a cotton bud to clean out the ear. But on rare occasions like this, when she was not around, we indulged in the sinful act with abandon. Moments later, my sister spotted a pencil lying on the floor behind the coffee table.

Unless somebody hypnotizes me and takes me through the sequence of events of that evening, I cannot remember what the noisy conversation was all about or even the dish we had just eaten. But, I can never forget the next few micro-seconds that followed as my sister reached for the pencil lurking behind the table. With left finger still in the ear, she bent and stretched her right hand to pick the tail of the pencil. As she pulled it up, it started becoming long and then its underside began turning to another colour and in a split second the pencil became squirmy. Suddenly, my sister screamed, “Snake!!!” How I jumped over the chair I was sitting on still eludes me to date. Everyone scampered for safety and the laughter and mirth gave way to the patter of feet and screams. Luckily, we got a neighbour to kill the unwanted thin and long guest and ever since I have stopped using pencils to scratch my ear. Nowadays, I only use keys, pen covers and, when Mum is around, the cotton bud too.

How She Made Her First Million, Weeks after National Service

At the age of 16, when Dayo Abegunde entered the university, she was looking for ‘fresh, different and exciting’. So she never bothered with courses like Medicine, Engineering and Law that freshers were clamouring for. Instead, she applied for Veterinary Medicine because in her words, “The study of lizards and cockroaches could only be fun”. It didn’t take long before the true state of things dawned on her. Her sophomore theory classes were so long and deathly boring, that she wished she could change courses. The practical classes were not any better as the formalin-charged laboratories often led to fainting spells in some of the students. The spells which they called ‘baptism’ was usually the aftermath of logging long hours in class on an empty stomach. By her fourth year, classes began by 7 am and ended at 7 pm, every day. 

Even though the course turned out to be anything but what she expected, Dayo decided that she would still make the best of her situation. She began to search for what was in vet medicine for her. She cast her mind back to the 4 years she had spent in school and began sifting through her experiences for what obtained for her. Luckily, the vet medicine course includes three internships. Her second year internship gave her some on-the-job training on a poultry farm. Her third year internship offered her some laboratory experience and she worked in a vet clinic, for her fourth-year internship. Grades notwithstanding, her training in the University of Ibadan had afforded her no small wealth of practical experience.

Abiku businesses III

In the last post we examined how failing to grow or expand can kill a business. I also shared the example of my barber who finds it hard to leave the self-employment business model for the franchise model. The example actually got me thinking about our Igbo businessmen. As brilliant and dedicated as they are to the trade of trading, we don’t have any of their businesses equaling the feat of companies like Shoprite™ or Game™. In fact, Shoprite just opened its tenth Nigerian store in Ibadan and, guess what, it is their largest mall in West Africa! And they have four more stores in the pipeline for 2014. Those boys just keep popping up everywhere! We will examine one last reason why we tend to have a lot of abiku businesses in Nigeria.

Chief M.K.O Abiola was a business tycoon larger than his country of birth and even Africa itself. He had investments on several continents and in an array of industry sectors; from automobiles to agriculture, from publishing to banking, from aviation to shipping lines and so on. As a lad, I grew to know his vast business empire to include the likes of Concord newspaper, Concord Airlines, African Ocean Lines and Abiola Farms. But as I write this piece, sixteen years after his demise, they are no more. I also remember travelling from Ilorin to Ibadan in the late 80s and staring in wonder at the tin-clad factories of the Alata Flour Mills. Today the structures are still standing, but I can’t recall the last time that whitish smoke rose from its chimneys. The famous Odutola Tyres of the 1970s is also no more. The last time I drove past the production plant in Ibadan with my father, who speaks forlornly about their bicycle tyres, it was eerier than a cemetery. Need I say more?

Abiku businesses II

Let us recap from my last post. We were examining how unlisted non-Nigerian businesses thrive for decades in our country while their Nigerian counterparts, which began operations at the same period, are long forgotten or remain runts with lack-luster performance. A friend who read the last post called me and said I trivialized it with the examples I gave. He then began his own catalogue of comparisons I should have used: DSTV and HiTV; Sumal Foods Ltd and Okin Biscuit Ltd; Dana Air and Air Nigeria etc. It must be said that each of the moribund companies have their peculiarities for closing down and would require a thorough investigation to unearth them.

One of the factors I believe to be responsible for the abiku syndrome is how early entrepreneurs lose their hunger for more.

Abiku businesses

Abiku is a Yoruba word which means predestined to die. The word describes children who die shortly after birth. The death could occur anywhere between a few hours after birth to a year on. Families plagued with the spell of abiku or spirit-child often go through successive episodes of burying their babies before they have a child who finally stays. Indeed, surviving children are christened with names such as Durojaiye or Durotimi, which denote staying alive. The advent of medical science has however revealed that genetic and congenital factors, not some cosmic mysteries, are responsible for infant mortality. Parents are now aware of infant-exterminators like genotype incompatibility, malaria and other immunizable diseases; hence the fading of abiku from the Yoruba vocabulary. But, I need to resurrect the word.

I am not using the word in the post-natal sense, though. Instead, I want to introduce you to Abiku businesses; businesses predestined to die. Thankfully, corporate law has laid out the ‘personality’ of business entities, so I can safely use the word ‘die’. It is commonly said that 4 out of 5 Nigerian startups will cease to exist after the fifth year, but that is not my headache; we can chalk that to Darwin’s ‘survival of the fittest’. My pain is what becomes of the one surviving business. You see, after years of dreaming about a business, after hours of toiling to set it up, after navigating the treacherous economic terrain of this country and after surviving beyond the proverbial fifth-year of demise, shouldn't these businesses have come into their own?

Minting Money from Ice

Introduction

His name is Rotimi Odewale and he lives in Ibadan. He is in his forties and runs his own businesses. Although he graduated from the University of Ibadan with a degree in computer science, he is a self-taught manufacturer of industrial ice making machines (ice makers). From the construction-shed he built in his house, he supplies customers in far-flung cities like Kaduna, Calabar and Bauchi; and he almost always has a backlog of orders. What I found most intriguing however, is that after seven years of successful business and over 500 machines sold, the man still doesn't have an office - the kind equipped with an executive chair and air-conditioning - instead he spends his day at work with the machines, hammering, welding and the like. This is the master stroke of his career, but we need to go a little back in time so you can understand how.

A front-loading ice maker built by Rotimi

Akara Ayo (written by Segun O. Adio and Deji Yesufu)

Dedicated to the memory of sixteen young Nigerians who lost their lives at the National Immigration Service recruitment exercise.

Arouse the average unemployed graduate from sleep and ask for his dream place of work. In a flash, he would tell you a bank, or the oil sector, or a federal institution or a telecommunication company. He would never tell you he prays to work in the unregulated and scorned informal sector. Who could blame him? All the years he sacrificed to get an education was to get a ‘befitting’ job. So when you find a graduate who obtained a bank job but voluntarily turns in his resignation to embrace a blue-collar job, you want to know what went wrong. When you find that the job he willingly embraced is frying and selling akara (bean-cakes), you want to know what really really went wrong!

Front and side views of mobile shed

Anything for me?

Even though I write this piece as a Nigerian, with fellow Nigerians as the primary target audience, its application is universal.

Let’s perform some mind-reading activity together. Look for an infant; that’s a baby anywhere from a day to six months old. Give it any object: a button, a lock of hair or even a feeding bottle and I will predict what thoughts are racing through its mind. As it grips the object and stares at it, it is asking the question: “What is in this thing for me?” A second later he will immerse it in his mouth and moisten it with saliva as he tries to figure out what he can get from it. Sigmund Freud calls this phase of infanthood the oral stage and I daresay that the average Nigerian is stuck in this phase and may never outgrow it. Let me explain.

If a thing is worth doing.....

All peoples eat bread. It is a staple of every continent and culture and it abounds in plentiful varieties. Some bake theirs till it makes a dark-brown, hard crust and others, crusts of a lighter hue and softer feel. Some shape it long, thin and round while others carve it in rectangles with mounds on top. Some pack theirs full of extras like fruit and cocoa and others insist on plain and smooth.

In the same way, people have many choices of accompaniments for their bread. Some dip it in wine and others in hot tea. Some slap a sausage between the slices and others cement the slices with cheese. The ones on a diet munch it with chopped greens and those un-worried about thick waist-lines fork it down with scrambled eggs. But this morning, I’m taking my bread with butter.

Deja vu

One lazy Saturday afternoon, back in 1998, I took a long nap. I woke up refreshed and ready to go to the library, when I remembered that my textbooks were with Taye, a friend living some rooms away in my dormitory. I rolled off the bed and poured some water into a bowl. I opened the door, stepped out, splashed some water into my face and then I felt it: the sensation of knowing what I was about to experience. As the water touched my face and my palm rubbed over my nose, there was a strong feeling that I had experienced this sequence of actions before. I stopped for a bit, then waved it aside as the remnants of a deep sleep. I went back into the room and wore something decent for the library.

Bitter Pill

Annually, malaria kills as many as 700,000 African children under the age of five. God bless the World Health Organization and the myriads of NGOs, who supply us with mosquito nets which reduce the spread of the disease. But as no one spends all his life under the nets, we still get bitten by mosquito and contract the dreaded malaria fever. I actually fancy the thought that mosquitoes are nocturnal insects which started running daytime shifts just to suck our blood; because most of us are safely tucked under the nets at night. Every now and then, when preventive measures like mosquito nets fail, we recourse to curative ones.

One very common cure, back in the day, was Quinine – the bitterest substance I have ever tasted since birth. For the life of me, I still don’t understand why there were no sugar-coating or sweetened variants! There was the Quinine syrup for kids and Quinine tablets for adults, but everyone hated them. From children to parents, doctors to patients the drug was abhorred, but it was the only thing that could cure malaria. Uptown kids, like my wife, were encouraged by parents to drink it by promising a treat, say a bottle of Fanta, for downing the face-contorting, tears-evoking potion. But for people leaving on the other end of town, such as yours truly, there were no positive inducers like Fanta or ice-cream.

I too know

I have often been nicknamed ITK; that’s short for ‘I too know’. It means someone who is supposed to be a storehouse of information. It’s not an entirely positive word or even a compliment because it connotes some degree of conceitedness. Whenever I am called ITK, I retort with some angry criticism until I overdid it at an open day.

I accompanied a friend to visit his daughter in elementary school. The pupils were all happy to see us and on sighting us Titi, my friend’s daughter, ran towards him with open arms as he gathered her in a tight embrace. She greeted me too with a beautiful grin and handed me some mock paper money. I was about to thank her for the generosity when her class teacher walked up and asked her to tell us how she made the money.

12 Eons a Slave

As we drove off, my wife and I looked at each other and shook our heads. From the reflection of the street lamps on her face, I caught a tear-drop sliding down her cheek. She shook her head again and remarked with a tinge of pain in her voice, “We all are hypocrites!”

Office face-offs

I don’t know if you've heard about the village that was connected to the rest of the town by a very long and narrow bridge. The bridge must have been built during the carriage era because it could accommodate only one car at a time. It is therefore customary to find cars on one end of the bridge patiently waiting for traffic from the other end to cross, before embarking on it. But on this day, two impatient motorists were approaching the bridge from the two ends. Although, it was quite easy to see vehicles from opposite ends, neither driver applied the brakes. Instead they picked up the speed, that the dust they kicked up on the dirt track before the bridge was as thick as an atomic cloud. By the time they stepped on the brakes, both cars were facing each other in the middle of the bridge.

After an eternity of staring down each other, they killed their engines. The younger driver then decided to really infuriate the other so that he will be forced to back up the car and make room for him. He picked the newspaper he had just bought, stepped out of his car and sat on the bonnet to peruse the contents. When he heard the sound of the other car door opening, he stole a glance and saw the driver coming out. He had braced himself for all manner of invective when the older man cleared his throat and respectfully said, “I see that is today’s paper, could you kindly pass it when you are through?” I can’t recall how the story ended, but there is another face off that ended funnily.

Techniques for obtaining highly efficient employees

Another reason that people advance for not going into business for themselves, especially those who have a day job, is the dearth of trustworthy employees.

I, for one, have heard of several people who desired to go into the business of transportation but got discouraged when they were told about several other businesses that were ruined by unscrupulous drivers. “You can never be certain of the story they would come up with at the end of each day” a transportation business owner once complained. “If it isn't one of a broken down vehicle, it will be one of arrests by the traffic police. But, rest assured that you are not getting any remittances that day”. We will come back to how he rescued his business but first let’s hear from a friend who described his employees as godsends.

Six degrees of separation

Lack of funds or insufficient funds is a reason many people give for not going into business. They are aware of the challenges that start-up businesses face and will not embark on one until they are assured of sufficient capital to run the business. They also know that for a country like Nigeria, there is greater hope of finding the path through which water enters the coconut shell than there is for finding loans and overdrafts in the banks. I wish to share a few insights for getting out of this tight corner.