28 Apr 2019

Out of one, many

This weekend I was privileged to share moments with entrepreneurs under the MRF program. It's always good being around entrepreneurs, there's a lot of "notes to compare." I must also say I'm really inspired by the number of young people who won't just sit back doing nothing but who go out boldly in pursuit of a vision and who eventually witness great things happen. 

But of even greater magnitude is the inspiration behind this foundation is a : two young people who were not only pursuing their lives at the time of their unfortunate demise; but who will forever be remembered as an embodiment of true love and sacrifice. As I sat in the room with all the entrepreneurs benefiting from this program, I couldn't help but think of this scripture:

Very truly I tell you, unless a grain of wheat falls to the ground and dies, it remains only a single seed. But if it dies, it produces many seeds. 
John 12:24 (NIV-UK)

Mbugua and Rosemary may have been one seed and though we mourn their lives cut short, it is comforting to see many entrepreneurs being impacted in their memory. And there is no telling how far the ripple effect travels - for these entrepreneurs may each build an ecosystem that in turn reaches out and impacts many more lives.

28 Mar 2019

Savings Equals Seed for a Future Harvest of Wealth

Yesterday I had the great honor of speaking to university students under the KamiLimu mentorship program about financial management. Speaking to a group of tech students in this Information Age poses one main challenge: you have to present value as this is the day when someone can easily look up whatever information you put to them and challenge it against a million sources online - more so when the audience is a team of tech students. Indeed, I did not hesitate to share this with the team: that all the information I'd be presenting is nothing they wouldn't find by themselves if they sought it out. This being the case, it meant that I was more of a facilitator leading a discussion.

There is something nostalgic about speaking to university students. It reminds me of my days in college where we tried our hands at quite a number of businesses - mostly without success. In hindsight, failure was not necessarily a bad thing. As it has been said, it is better to try and fail than to fail to try. Of course, it is best to try and not fail. They say if you never failed it simply means you never really tried. Success has also been said to be a result of constant failure and improvements. There are also lessons from failure that count for one's success and in the same way that darkness helps us to appreciate the light, failure has a way of making us appreciate success.

One of the things we discussed with KamiLimu students however is that not everyone is cut out for business/entrepreneurship. There are some of us who will do very well in employment and therefore we cannot put pressure on everyone to start a business. The important thing in life is to find who you are meant to be, what you are meant to do and to do your best to flourish in that given space. For me, it seems that entrepreneurship was always beckoning. 

A key highlight from our discussion was a quote from an article by Kellie Murungi,

When you postpone the start of your saving and investing journey, you are losing the one asset you have in your twenties that the rest of us do not: time.

We looked at the two main reasons why you should start your savings now:

  1. The power of habits. If you get started now, it is easier to keep the habit building. If you try to start later, you will have to summon the will to start and though later in life you will probably be earning more, similarly you are likely to have more responsibilities; making it even harder to build a savings culture.
  2. The power of compound interest means that the earlier you start saving, the more you will stand to gain. A person who starts saving later in life will have to work much harder to attain the same financial goals as someone who started earlier in life. 
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George S. Clason in his book Richest Man in Babylon says that wealth like a tree grows from a tiny seed. The first coin you save is the seed from which your tree of wealth shall grow. The sooner you plant that seed the sooner shall the tree grow. And the more faithfully you nourish and water that tree with consistent savings, the sooner you may bask in contentment beneath its shade. The important thing about building wealth is that you need to start doing it sooner, rather than later. The earlier you start, the more time you will have to build your wealth. The earlier the better. As the saying goes, the best time to plant a tree was twenty years ago. The next best time is now. 

88 year old Warren Buffet planted his tree a long time ago. Buying his first stock at the tender age of 11, he regrets that he did not start investing earlier on in life. Someone is sitting in the shade today because someone planted a tree a long time ago.

To know and not to do is not to know. We have to find a practical way of putting into practice that which we learn. MoneyBox is a good place to start your savings journey. Growing out of the 52 Week Savings Challenge pioneered by Kellie Murungi, the user friendly app helps you in setting and remaining true to an annual savings goal. 

Like a muscle that grows stronger with consistent use, a savings habit grows by consistency; and as a journey of a thousand miles begins with one step, the journey to growing wealth begins with the financial discipline of saving your first coin. All the best in the journey ahead.

30 Nov 2018

Should Startups Provide Free Services?

Last week I gave a brief account of how we began what is today Prolific Business Consultants. It all began with providing bookkeeping service for free and then we saw business grow out of referrals from those free accounts. Which brings us to an important question for startups: is it okay to offer your services for free?

There are many who will argue that it is not a good practice to offer your service for free. Proponents of this school of thought would not agree with the idea of providing free service in the hope that it would generate more business. 

There are good enough reasons not to offer free services. The first reason lies in the basic understanding of business's primary activity: sales. The most basic definition of a sale is providing a product (or service) that meets existing demand. You have no proven demand until you have enough people willing to pay for your product i.e. to part with money in exchange for the product or service you are offering. If all you have are willing consumers, but who are not ready to pay in exchange for the service or product you offer, you may not yet have found a sustainable business model. 

In short, the business will grow when it finds enough customers willing to pay for the provision of goods/service. If that is the case, it would appear a risky thing to provide free services. 

The second reason is that generally, people are ready to pay for what they attach value to. There are instances where we value something and genuinely cannot afford to buy it. However, we will mostly find ways to afford that which we value: we start saving to buy it at a later date, we sacrifice that which we deem of less value or look for an alternative source of income to finance that which we deem valuable. This means that if people are not willing to pay for a product or service, it may not be of great value to them. What does this mean to the entrepreneur?

It could be that the product or service is not sufficiently meeting a given customer need. As Uri Levine says, fall in love with the problem, not the solution and the rest will follow. As entrepreneurs, the main temptation is to focus on our solution. PM Paul says that the number one reason why startups fail is that there was no market need. Therefore, it could be that the reason customers are not willing to pay for our service is that we have not fully identified with their pain and therefore whatever we deem a solution actually is not so. The challenge then is to see the product through the eyes of the customer. If it solves a problem, who wouldn't pay?

Are we then advocating for startups to provide free services for their businesses to grow? Not necessarily. We are noting that there are good reasons not to offer free services, but also acknowledging that it got us started. The important thing to note is that we didn't merely offer the service for free so that we could get started. We were involved in something that we loved so much we were ready to do it for no pay, and we did it well enough until there were enough people willing to pay for it.

Now, it is not that we have attained all that we should be; neither have we reached perfection. We are not saying that we have it all together or that we have made it. No. We do not consider ourselves to have laid hold of all that we can be; but we reach forward and press toward The Goal. We do not count ourselves experts in all of this, we fasten our hearts to future accomplishments.

24 Nov 2018

Prolific Beginnings

Today I had the very great honor of sharing my thoughts and experiences with the Sinapis Business Aspire class at the Mint Hub as a guest speaker addressing record keeping for small businesses. As an alumnus of the Sinapis program, it was quite nostalgic. This class features aspiring and early stage entrepreneurs and it brought to mind the starting days of what is today Prolific Consultants

How we began
Having gained some experience working at an audit firm and armed with the vision of one day running a consultancy firm, I approached my friends who were also starting out in business and offered to provide book-keeping services for them. The standard answer (probably because they were also starting out in their respective businesses hence bootstrapping) was: 

"I cannot afford the services of a bookkeeper." 

My response at the time was always the same: 

"I did not ask for money. I simply offered, if you are so interested, to be your bookkeeper." 

...and thus the journey began.

Now these initial clients proved to be very useful to our growth. First, they enabled us to build a company profile. We could now say we had done accounts for so and so and this in a way built the much needed credibility in those initial days. Secondly, they provided referrals. As a matter of fact, our first major client happened to have heard of us from two of those clients and couldn't wait to meet these prolific guys. As such, even if they did not initially pay, these first clients became instrumental in directing paying clients our way. 

So, are we in this for the money?
In a recent article, Sunny Bindra poses this question: what kind of business might you run if making money was not its only aim?
We discussed this question at our business and found it is a very balanced question. Sunny does not completely disregard the profit motive. He shifts our thinking to consider money as one among many success metrics that a business would have. Money is important, but we agree with the wisdom posed by Sunny that there is more to the business than just making money. There is deep fulfillment in providing service that offers value to our clients. There is joy in living our passion, serving our gift to humanity and money following as a reward for exemplary service. 

11 Jan 2018

STARTUP: The Good, the Bad, the Ugly (A Movie Review)

Happy New Year!

This year I'll start my writing with a first: a movie review! Yes. Over the holidays, I got an opportunity to watch a series recommended earlier to me: STARTUP! - (starring Kenyan-born Edi Gathegi). 

The show has quite an interesting plot of this startup trying to secure investor funding. It starts as the story of one girl named Izzy; who has this brilliant idea to change the world by launching a digital currency known as GenCoin.  In quite a dramatic turn of events, Izzy is joined in her quest by two very different young men, but who buy into her idea; and the trio set out to build the world's next big thing! 

STARTUP is basically a reflection of our current world - there are those with ideas, and those with the money - and the challenge has been to match the two: on the one hand, those with the money are asking,

"Where do I invest this money for a good return? How am I sure it is a worthwhile venture?..."

On the other hand, there are those with ideas and they are asking,

"Where do I get the money to make this idea a reality? Where do I get the seed money to make this idea grow into a huge tree and even to a forest?"

So this is a very modern series, set in the current 21st century circumstances of matching money with ideas. I should note here the striking coincidence that as I watched this, Strive Masiyiwa had just started on a series of Facebook posts about financing for your business: very good practical stuff.

The Good, 1: Entrepreneurial Character 
Set in our present day, many businessmen will identify with the STARTUP. It is easy to identify with the entrepreneurial character exhibited by the team. The first thing an entrepreneur may encounter when they start out is ridicule from close friends and family, who wonder why the crazy idea to start a business - especially if you are young and just from school. This is not to say that we should not be employed after leaving school: in fact, the work environment may be very important to equip you with the skills and attitudes necessary to run your own business. Nevertheless, that ridicule is expected: whether due to the timing, the perception others have about you or even just how much "out of this world" your idea seems.

STARTUP also shows the many challenges a startup will face. As I have written before, starting a business is not a walk in the park and having started, you will almost certainly lose money.
STARTUP takes us through the important values of resilience, tenacity, creativity, ingenuity, teamwork and I think above all, genuine partnership.

The Good, 2: Business Language
Another very good takeaway from this movie is language. Great minds in the world of business will tell you of the importance of language. You have to learn the language of the world you want to operate in. Robert Kiyosaki for example says that to run a business, you have to learn the language of money. You have to be able to interpret financial statements. In the same way, STARTUP does a very good job in teaching the language of looking for financing: both literally and figuratively.

Startup. Angel Investor. Proof of concept. Hostile takeover.  Valuation. Buyout. Bootstrapping. Problem. Solution. Why You?

All those are words that a startup in the 21st century would want to be familiar with. It is the language of that world.

The Good, 3: Disruption
STARTUP, set as it is in our day, captures very well the times we are living in: times of great disruptions in almost every sector. This is a day of countless innovations. Technological advancements are coming at us at dizzying speeds. Indeed, there is no time for one to ever rest on their laurels. STARTUP exemplifies this very well. Even when their original idea is stolen from them, they go back to the drawing board and come up with another brilliant idea that brings their competitors back to the negotiating table.

STARTUP explores possibilities within new technologies particularly for digital currencies and Darknet markets. 

Speaking of disruption. STARTUP is in itself a product of Crackle. Now, Crackle is a video streaming distributor of movies and TV shows, owned by Sony Entertainment. The Internet brought about significant disruption in the movie industry; from purchases and rentals to online streaming. Sony could not afford to remain in the past, hence Crackle. # DisruptionGalore!

The Bad
Why is it that today's TV is so full of casual sex? I think STARTUP would still have been a very good show without all that "sexing up". I believe it is still possible to do a good show without all the sex. Breaking bad is a good example that comes to mind. Hardly any sex and yet a very compelling show.

The Ugly
Gencoin is stolen! The great idea that the three entrepreneurs sought to place on the world platform is snatched from them.  In scenes characterized of tears, the entrepreneurs' baby is taken from them. In a nutshell, they are conned out of their idea and basically kicked out of the company. In a heart rending discussion with her uncle, Izzy puts it thus:

"The lawyers called it a hostile takeover..."

I think this is a sad affair but it happens the world over. Investors come in and as they bring money, it is in exchange of control. The million dollar question is, how much control to give up, in return for how much funding? Also, what kind of funding - is it debt or equity?

A powerful illustration of this reality is Steve Jobs, kicked out of Apple, the company he had founded. Luckily for him, he was able to come back to Apple and at the helm. Not all edged out entrepreneurs are as lucky as Steve Jobs. This is neither to give investors a bad name, nor to discourage entrepreneurs from seeking investor funding. It is just a word of caution: it is important to find the accurate balance between how much you get in funding (without which the business may not grow); and how much control you cede. This calls for wisdom.

29 Dec 2017

Reflections from a Bowl of Fruits

I just bought a handful of plums for 100/-. Just a bunch. Why would plums be more expensive than grapes? I get, they're seasonal but hey? Doesn't add up. 

Be that as it may, this reminded me of our growing up days in a farm. With some fruit trees, we had more than enough plums; and it got me thinking:
  1. Never take for granted what you have. The wise would say, you never know what you have till you lose it. Well. The eyes of the wise then will be open to treasure what they have and not wait till they lose it.
  2. Tomorrow may be different from today. How prepared are you? It all depends with how much you see. George S. Clason says that opportunity is a haughty goddess who wastes no time with the unprepared. 
Living on that farm, it was hard to fathom a day when I would have to buy those same fruits so dearly. There are two types of conditions here that changed. I'll call the first micro i.e. The personal conditions involving my family's rural urban migration: hence no more fruit trees. The second I'd call macro i.e. Inflation in the country pushing the prices of plums high.

Both are in a way representative of changes we all go through. Micro changes at personal and family levels. Macro changes at national and global levels. But they all affect us. They affect the ease with which we can access "fruits", no?

Well. What do you have in your life that you currently take for granted? Family? Good health? Peace? Don't take it for granted. Be grateful.

How could your tomorrow change from today? Are your eyes open to the shifting landscape? How would you be more prepared? 

May 2018 find us more grateful and alert.

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15 Dec 2017

A Letter to My Niece Starting Her Cake Business

Dear Stella,

It gives me great joy to hear that you have decided to venture out and start your cake business. At first, I feared for you when you said you had left employment. But then again, I really have to admit we are living in different times than the ones our parents lived in and as Bob Kiyosaki would say, there is no longer such thing as job security. 

I don't know if you find this a cliche but let me say this: starting a business is not just a walk in the park. But let me not be the one to discourage you so early in the journey. So let me put it as I have found it to be: starting a business is like mountain climbing. Not that I have ever quite climbed one but from what some of my friends who have climbed mountains tell me: it is both a tasking and enjoyable business. You will undoubtedly have your fair share of challenges in the business, but there will also be lots of moments to celebrate.

The Ultimate Gift
I think the greatest gift that I have gotten from running a business is the growth in my character. The first thing that a business builds in you is discipline. Discipline in management of two critical resources: time and money. Let's talk about each one:
  1. Time: Many people want to leave employment and start a business to be their own boss. It ideally means that you no longer have reporting time to the office. If your boss was like the lady boss in that movie you had brought me to watch (was it called The Devil Wears Prada?) - then you feel that you are finally out of hell - starting a business then feels like your journey to heaven. And this is where discipline comes. It will take discipline for you to still give enough time to your business as if you were actually employed there. If however, as you have told me before, baking cake is your passion, then this should not be much of a problem. After all, the desire to bake will be pulling you as opposed to you being pushed by any other external force. But then as the business grows, you will find another side of that very same coin. You will find that the business will want more and more of your time - more time than you can ever afford to have - and that's where again, you will need more discipline. You will have to learn to tell the business, enough is enough; I've done enough work for today. It's time to rest. If you don't learn to do this, you will be like the foolish man that Steve Covey said was too busy driving that he didn't get time to stop and fuel. There is no prize for guessing what happened to his journey. Of course to do this, you have to build the kind of systems that Michael Gerber talks about: the kind of systems that ensure you do not just work IN the business, but you mostly work ON the business. If you promised to buy me coffee I could tell you more about that - but it just helps to know that you will need to be disciplined about your time. 
  2. Money: money, money, money! We're always looking for more. I think money plays a critical role in informing one's decision to start a business. First, many are held back by the comfort provided by employment. It is quite understandable. If my monthly salary is not nearly enough to cater all my expenses, what happens when I face certain expenses and uncertain incomes when I leave employment? So in that way, the fear of the unknown holds back many from jumping ship. I must therefore commend you that you have been brave enough to venture into the world of business. Now, what I found upon leaving employment is that money cycles for a business person are quite different from when I was employed. In summary, I can tell you that when employed, money cycles are quite regular. I knew how much to expect, when to expect it and could predict where to spend the money. I could even afford to borrow and give an almost definite date of repayment. Not so running a business. With a business, I'd say the money cycles are irregular. Whereas some expenses are constant, not so with incomes.  So what do you do? You have to try and regularize your money cycles. How do you do this? There is so much I could say here - as you know it's my area of work and I risk boring you with too much detail. So let me simply summarize this and say: in the days of plenty, remember there will be days of lack. Develop a discipline around your finances. 
I could probably write endlessly but then; no matter how much reading you do, how much advice you receive, you still have to chart your own path and discover your unique lessons. Nevertheless, I think it does no harm to hear a word from those who have gone before you and avoid reinventing the wheel.
Stella dear, I think enough said for today. I wish you all the best. As Uncle Sam would tell you, the best time to start this business was yesterday. The next best time is today. So congrats for the big step of faith. Oh yes. It is a step of faith. Calling something that is not as if it is and seeing it come into existence. I look forward to seeing your business grow into a household name. (and of course I'll love for you to hire Prolific as your accountants :)

All the best,

Uncle Jeremy