Kazi Kwa Vijana Initiative
The youth fund now is set to be raised to 5billion over the next three years. The youth enterprise development fund has so far financed more than 65,000youths across the country, and created 200,000 job.Also in addition there is the women enterprise fund, currently 1.2billion is currently set aside for the fund. 92,000 women has already been disbursted with 682million, and still an additional 500million is to be added to raise the total available for women to 1.7billion.
The challenge of being an ICT entrepreneur
The Information and Communication Technology (ICT) sector has been one of the key contributors to the impressive growth performance in Africa over the last decade. To sustain this growth momentum, it is imperative that African governments, besides fostering peace and stability, create an environment that would be conducive to the growth and development of ICT entrepreneurs and nurturing young talents similar to the Silicon Valleys in India, United States, Israel and other countries. Recognising the economic potential of ICTs for Small and Medium-Sized Enterprises (SMEs), they should be assisted in increasing their competitiveness by streamlining administrative procedures, facilitating their access to capital and enhancing their capacity to participate in ICT-related projects. An example would be to offer incentives in form of tax rebates to ICT entrepreneurs who export their goods or services out of the country, inorder to encourage export of ICT services.
Private equity always expensive
Michael Macharia, founder & Group CEO, Seven Seas Technologies (SST), the top local ICT integrator and provider of integrated business and technology solutions, says today the only source of capital is private equity or loans from commercial banks which are always expensive and hence it is time the Government invested in a pool of funds to support ICT entrepreneurs in form of Government private equity either by teaming up with private quity firms that are well established, who would then manage the fund and also guide and mentor the enterpreneurs in their Boards to ensure proper deployment and utilization of the funds for growth .
“Entrepreneurs would be encouraged to develop products for export if, for instance, the Government offers them loans which can be written off later and tax rebates on the revenues generated from exports. Countries like China and the Philippines are offering 10-year tax holidays to their IT companies. This way, Kenya can become a regional ICT hub”, Macharia says, adding: “As an ICT company, our largest overhead cost is the people element of our business in terms of salaries, travel and training. If these people develop and offer unique products and services to the regional and international market, then we should qualify to get rebates!.. Otherwise what motivation do we have to innovate and be the next Silicon Valley beyond personal sheer determination and will?” Access to capital remains a major constraint
While appreciating that Kenyan entrepreneurs have great ideas with more young talents waiting to be nurtured, Macharia says access to capital remains a major constraint. Arguably one of the most successful ICT entrepreneurs in the region, Macharia, 34, ventured into business at the age of 24 using his own capital, later bringing on board a venture capitalist and evenutally a leading private equity firm and has since transformed the SST group into a billion shilling plus business.
Macharia cites the Indian ICT industry that has witnessed excellent growth in the past two decades. Capitalizing on its advantages of talent pool, lower cost of operation and the innovative remote delivery model, India has established itself as a global leader in the ICT sector.
Collaboration fostered between new innovation destinations
Today, India is clearly acknowledged as the global services hub. He adds the foremost implication of innovations in the India ICT space was the collaboration that it fostered between the new innovation destinations like US, China and Israel. Between countries, there are lots of collaborative efforts towards raising funds to invest in state-of-the-art technology companies that will benefit both the countries. This leads to the development of the entire innovation ecosystem comprising of entrepreneurs, high-tech companies, startups and possible buyers .To achieve the same they created a culture or innovation and an ecosystem to nurture and encourage entrepreneurs. The Government, industry, institutes, investors and other stakeholders came together to create such an ecosystem.
“In Kenya, if we foster and encourage a culture of innovation and entrepreneurship, we could enable global competitiveness and equitable growth a reality in the ICT industry and other related Industry sectors”, Macharia adds.
Bitange Ndemo, Kenya’s Information and Communications Permanent Secretary concurs: “The speed of technological changes always is a problem in developing countries where capital is scarce. It is often very difficult to catch up when enterprises are undercapitalised with less returns that take far too long to achieve the pay back before technology changes.”
Ndemo agrees that partnerships are necessary in order to inject optimal resources that can assure better returns and a shorter pay back period.
“One of the challenges we face as entrepreneurs is the acceptance of your own product in the market. The other challenge is the time it takes to be accepted as a successful entrepreneur”, Macharia observes.
Not enough role models in the market
Then there are also historical challenges. According to Macharia, there are not enough role models in the market or there is little or no effort given by the media to showcase such success stories .The enterprenuers themselves also need to make an effort to showcase their successes.
Moses Kemibaro, Business Development Director and co-founder of Dotsavvy Limited, shares similar sentiments.
“By far the hardest challenge when getting started is funding. Most ICT entrepreneurs in Kenya and regionally normally have to start using their own savings as well as funds from friends and families. This is how we started. We also aggressively pursued business when we started to keep moving and asked for referrals all the time. Networking was also key by looking for business everywhere - you would be amazed that business is indeed everywhere if you network a lot and ask for it”, Kemibaro says.
According to him, another challenge is that of building brand awareness and visibility for your business - being unknown and unproven makes securing business really hard.
Competitive poaching is commonplace
“There are many challenges. The beginning is the hardest! Cash flow is by far the biggest one – ensuring you get paid is absolutely essential for the business to keep running. Securing and maintaining top notch talent is another - employees leave for better pay and competitive poaching is commonplace in ICT businesses. Establishing and maintaining good business practices and processes is another. I find that lately innovation in terms of offerings to be challenging since there is so much competition and you have to stay ahead of the curve to remain relevant when competitors are trying to win your customers.”
Inappropriate curriculum
Timothy Waema, Associate Professor, University of Nairobi’s School of Computing and Informatics, says inappriate curriculum remains a major challenge.
“The Computer Science/IT curriculum does not have adequate business courses while the Business curriculum does not have adequate IT/computer science courses. There is also lack of Government policy on incentives for ICT entrepreneurs, e.g. software developers or IT consultants. Then there is the widespread perception among university students that they are being trained to get a good-paying job”.
All the 7 public universities, more than 10 of the newly created university colleges and over 14 private universities offer a degree in computer science, IT or equivalent. They in total have a total enrolment of over 2,000 CSs/IT students and producing over 500 graduates year to year. This excludes the Diploma graduates. In addition, there are very many business schools that have Information Systems as a specialization - over 30 academic units train in business studies or related disciplines (e.g. economics) with some IT specialization. This is where other entrepreneurs come from.
“That is what universities are doing. Whether these are enterpreneurs or not is another discussion, which will involve examination of curriculum. But suffice it to say that anecdotal evidence shows that fresh graduates are increasingly creating their own companies and running them”, Waema says.
Challenges are surmountable
Though challenges abound, they are surmountable. According to Macharia, one of the ways of overcoming the challenges is to create an incubation platform that is sustainable. One of the reasons behind SST Group’s success has been its credibility in the development of local talent.
“We have about 70-80 percent talent from local universities and polytechnics. We have a very clear recruitment programme in which we hire staff and train them, before eventually giving them proper career roadmaps and certification”, Macharia offers. Again retention is always a challenge .
With a young workforce, companies face the challenge of meeting expectations in a market where talent is in the driving seat. The biggest problem that brings about talent shortages is the increasing gap between what universities provide and what the industry needs. So all companies in need of the talent should build close relationships with these institutions to help build a pipeline of skilled employees that can fill talent gaps quickly and cost effectively .
Knowledge 4 Life
“At SST we have created a platform that allows this kind of training to be available to those who need it. That is why we came up with the concept ‘Knowledge 4 life’. Knowledge 4 life is an initiative available on the social media networks too that allows us to train pre-screened university students when they are on holidays or weekends at our training centre for free”, Macharia says.
“We use our own already highly trained, experienced and specialised experts who we recruited from the same universities to train and mentor them. We then team up with corporates, integrators and competitors who are in need of these resources. In that way, we hope to have a vetted pool of staff available for the whole ecosystem and the cost of labour is maintained at realistic levels”.
SST came up with the idea of recruiting students after realising that the labour costs in the open market are exorbitant while the relevant supply is not available. While acknowledging that staff retention remains a big challenge as employees leave for greener pastures, Macharia says he works closely with the company’s Chief Talent Officer who devotes considerable time in talent management because talent is key to the company’s success, not to mention that great talent is willing to work for a company if it has a great and inspiring vision they can relate to, and a clear employee value proposition.
Share options for staff
“We have come up with share options for our staff to enable them own equity and create long term view of wealth creation. We see that as a way to keep them focused on the business and long term objectives rather than short term benefits .It does not mean we dont encourage the talent to leave and see what the world has to offer but we always leave the door open for them to return and this happened in several cases and they return with much more knowledge and experience”, Macharia offers.
The challenge, Macharia says, is to ensure that the company gets enough projects to keep talent motivated since most large organisations including government are risk averse to local organisations in terms of delivering complex projects .
“We, however, have come to understand this view and overcome it by stragetically teaming up with global delivery partners where we insist to be part of the team deploying projects so we can get the experience. In a recent case, we had an exchange programme where our staff were based in Portugal for a year to shadow and learn from the more experienced companies as we worked on a very strategic project for one of our key customers . The customers was happy with the arrangement and it has worked quite well for all parties.”
Indeed, the challenges facing ICT entrepreneurs are numerous. However, Kemibaro, who has been an entrepreneur for seven years, says in terms of beating or managing challenges, it requires first and foremost an unrelenting tenacity to build your dream - even when you do not have money to fuel your car or pay your rent.
“This is the key to being successful in the face of entrepreneurial challenges. Thereafter you can then engage strategies and tactics that will then keep you going. For cash flow, making sure services are delivered on time and quality is key. It is also important to hire competent team members who can deliver to client expectations. Sometimes it’s not just a better salary that keeps staff but other motivators like a good working environment and work-related travel for instance”, Kemibaro observes, adding: “I think branding is a key differentiator for business development as is having a good customer portfolio and testimonials that ensure you can get the job done. Another key factor is having technology that gives you an edge in the business market as well as business processes that add value across the board.”
Strong brand a powerful magnet
Macharia concurs with Kemibaro that a strong brand is a powerful magnet for potential employees and talent retention.
“As enterprenuers, we dont spend money and enough time on the image our companies project and clarity in what we stand for. Nurturing loyalty to the company’s brand and values is an increasinly important factor in talent attraction and retention since the fundamental backbone of our business is talent. And as SST continues moving up the value chain in Application Integration ,consulting and Outsourcing services where margins are more sustainable ,people are the number one priority.”
Sharing his experience with CIO East Africa, Macharia says SST was incorporated ten years ago and has a staff complement of 90 globally, with the number increasing by 25 percent every year. Besides Kenya, the company has branches in Uganda, Ethiopia and project offices in Rwanda. The company has undertaken significant and critical projects for some of the largest corparations, government institutions in the region and with a key focus in establishing some deals in Nigeria this year .
“Today we are a billion Shillings Plus business, we used our own sweat capital at the start of this business. It was a major sacrifice but at 24 years what did I have to lose ?. I was fortunate to meet a venture capitalist, by the name James Gachui, who later became a great mentor, and invested in the business after 3 years without looking at any balance sheet. Both our companies took a business trip to India and he was inspired by the energy and vision I had for the business and industry. Eighteen months ago, we raised money through Aureos Capital, a global private equity firm with offices in Kenya. The Private equity investors coming on board have assisted us grow and bring a high level of financial reporting discipline required for enterprenual business to scale and go public”.
Macharia is upbeat about the future of the company.
“Our dream is to really create a pan-African ICT organisation through collaborative synergy brought together by private equity fund with their other strategic investments in other ICT companies in South Africa and Nigeria”, says an upbeat Macharia, adding: “We want to become the biggest outsourcing and application integration business in this market. “Our destiny is simple. We want to be a pan-African organisation delivering IT services in the consulting, applications and infrastructure outsourcing arena. In my mind I am clear that we want to be efficient, more agile, using our own local skills utilizing a consistent geographic neutral delivery plaform and our own IP and I am extremely bullish we will achieve this through strategic partnerships, talent management and gradually shifting from a‘box’ to a service oriented organisation, hence our positioning statement “Service Excellence Delivered.”
Incubation arm to nurture entrepreneurship
The company is in the process creating an incubation arm to nature entrepreneurship and innovation within the organisation .
“In two to three years, we’ll have gone IPO or a synergystic merger or acquisition with a global organisation. We’ll look for organisations that share a common vision with us”.
Macharia says one issue that needs to be addressed is the need to adopt quality frameworks in the region.
“We don’t have standards. I would say the standards of ICT are controlled by vendors. We need to have standards, like those of engineering where all technological courses have a standard qualification. Just like in other global markets, we need to harmonise standards in the region in terms of software development, infratsructure and security management. Some of the standards include and not limited to (CMMI, ITIL , ISO ,PMI ), but these will have to be driven by customers and the organisations like the Kenya ICT Board . They have to insist on a level of certification and competence and in turn the local companies will sharpen their internal delivery process in order to compete at a global leval .”
BPOs collapse in quick succession
It is the lack of standards that is partly to blame for the collapse of BPOs in quick succession. According to Kemibaro, Kenya is relatively unknown and untrusted as a BPO destination. The firms in this sector have to discount services heavily and do not have the credibility to access key accounts directly - instead working through intermediaries. Also, until the high speed cables arrived, bandwidth has been too expensive and unreliable so services being offered could not be done so efficiently or profitably. There is also the issue of service delivery - Kenya is relatively new to BPO work so the investment alone required to train and create high standards as well as processes is high - its a steep and expensive learning curve.
Waema says that while the collapse is expected with all start-ups, we still do not have an appropriate strategy and support to encourage growth rather than death of BPOs.
According to Ndemo, the problem with BPOs is less than optimal investment in the sector.
“We plan to locate them in one area where resources can be optimised and each can grow. You need at least a 250 seat capacity to succeed yet most Kenyan enterprises have less than 50 seats”.
Regional ICT hub
Despite teething problems, Kenya still has the potential of becoming a regional ICT hub.
“Like with banking, Kenya can become a regional ICT hub. Most of the big banks are now in Kenya. As for ICT, Kenya should tap its human resource and encourage local investors. The Government must be seen as a high adopter of technology and have the right incentives to make people invest”, Macharia observes.
Dotsavvy’s Kemibaro sees the need to have centres of excellence for training and service delivery.
“Strategic partnerships with international businesses and countries who have achieved what we are trying to do is key. We also need to disconnect ICT services as meaning BPO - there are many ICT niches that Kenya can be successful at and not just BPO. We, for instance, export our web services to clients in the US, Ireland, Zambia, Tanzania and Uganda. Imagine the potential of ICT from this perspective - every Kenyan ICT business could be a global business from right here in Kenya even if its a small firm”, Kemibaro observes.
But while acknowledging that the Government has done most of what needs to be done in the ICT sector, Ndemo says, “we need to scale up the transport and energy sectors which impacts on what we do in the ICT sector”.
On his part, Waema says the Government should develop solid and quality infrastructure, take talent development seriously and prioritize it, create an enabling environment - especially political, policy, regulatory and institutional and have a high level leadership and championship of ICT in government that is cascaded at all levels of Government.
And therein lies the challenges and the opportunities for enterprenuers for Vision 2030.
“There needs to be much more marketing at Government level through Public-Private Partnerships (PPP). This is already one of the reasons the BPO sector has challenges - there is a lot of work to be done and 2030 is just around the corner. But the process has begun and it’s getting better everyday. We can make it happen but so much more effort is needed right here and now”, Kemibaro observes.
Macharia agrees.
“In his Jamhuri day speech, President Mwai Kibaki made reference to technology, mentioning about the digitisation of court and land registries. This is very encouraging as technology can be used to eliminate corruption. These are great strides and opportiunities for the local entrepreneurs to rise up to the challenge. We plan to play heavily in this sector. The government is always the largest spender”, Macharia says.
He further adds that a key learning that has always motivated him is Peter Drucker’s ‘The entrepreneur always searches for change, responds to it, and exploits it as an opportunity’.
Overall, the future of ICT looks bright in the region.
“There are so many prospects that it’s hard to tell. BPO has already been seen as key for Kenya and the region. But what about KPO? Not much has been done in this area (yet). There are many KPO prospects for the region for professional services. In many cases, KPO requires far less resources to set-up than an BPO business. As a region, it would seem that the rest of the world has run off with most of the opportunities but consider Ushahidi which was delevloped in Kenya for crisis reporting and is now a global phenomenon. There are many success stories waiting to happen”, Kemibaro says.
According to him, we need more innovation centres for ICT as well as funding for good ideas.
“We need to improve industry standards and practices. We need to tell our children that being a lawyer or a doctor is not the only profession worth having and that they can make a living as techies doing software and animation. There is a very very broad scope for the future in the region”.
On his part Ndemo says Kenya will soon be as competitive as India or the Philipines.
“We shall soon be leaders in content production”, Ndemo enthuses.
As part of Vision 2030, the Government is looking for appropriate facility to develop incubation centres for ICT young entrepreneurs. This facility will be classified as an Export Processing Zone (EPZ) for the entrepreneurs to take advantage of the benefits in such a location. The Government is also developing a Special Economic Zone (SEZ) that will have far greater benefits that before and will also embark on aggressive capacity building programme.
Young Kenyan entrepreneur finds success in sunflower oil business
It is 2.30 pm, the sun is blazing hot in Makutano village, Makueni District – about 80 miles from Nairobi. Kiilu has his white shirt and hands greased in oil, beads of sweat cover his face as he inspects the mammoth oil storage tank.
After what seems like eternity, he retreats to the front office where he is setting a mini shop for retailing his pure oil named Hafya. But what would make a young man, born and raised in the city, to retreat into the village? “I loved discussing business plans with my friends and family [ and it was during such a moment] when the idea of sunflower processing came to mind,” Kiilu says when he settles for the interview. His friends were against the idea partly because it was not “youthful” or attractive. “But my old man played a very big role in this. He encouraged me,” notes Kiilu.
He explains, “I just decided to shut out the negative voices and go for what my heart craved for. Life without risks has no romance.” He was in his third year at the Nairobi University in 2007 studying electrical and information engineering – that he started the project with the support of his father.
But why would Kiilu opt for the village? “It was about cutting costs, number one. It would have been very costly to set up in Nairobi in terms of renting premises and other factors. But again I also wanted to offer some employment to my people in the village.”
There were obstacles to grapple with. Despite not being far from the nearest electricity source, KPLC took 10 months after his application to connect power to his business location.
“Getting sunflower seeds for pressing was a hustle, especially after the post-election violence, just soon after the work had begun. We had difficulty getting seeds from Western Kenya,” Kiilu says. Western Kenya was the worst hit during the post-election violence of 2007 ,so he decided to source seeds from Mombasa and Oloi Toktok.
An engineer himself, Kiilu has been able to cut costs by fixing electrical and other technical aspects of the plant himself. He diagnoses mechanical problems on site and repairs them as they arise.
Extracting oil from sunflower seeds is a technical and tedious process. Referred to as oil pressing, the extraction process begins with the mechanical expulsion of oil from the seeds. This initial process gives out an end product of unrefined oil known as ‘cake’. The ‘cake’ is transferred to a settling tank where decantation – heating of the oil to do away with particles – is done before the partially refined oil is relocated to a storage tank. Filtering is then done to remove pulpy invisible dust, in a procedure referred to us ‘rooting’. Lastly, the oil is refined before it’s packed in varying quantities.
To do this effectively, Kiilu says that he had to start small and use his profits to make improvements and get other necessary machines. For one to successfully set up a pressing firm, an oil press, vacuum cleaners, refiner, settling tanks, food storage tanks, bottling line and shrink-wrapping machine are mandatory.
Kiilu currently packs 500ml retailing for Kshs 105 ($1.4), 1 litre at Kshs 200 ($2.6), 5 litres at Kshs 850($11.3), and 20 litres at Kshs 3,400 ($43.3). The waste product is a protein-rich substance sold to animal feed firms.
Still youthful, Kiilu is upbeat about his future. Striking as a jack of all trades and a master of all, young Kiilu is experimenting with flour milling through his mother company, Kilimanjaro Light Industries.
The road to success, he notes, has been bumpy and even now, Kiilu still struggles to push the product to the end market. Sunflower seed prices have since gone up, and the cost of production continues to skyrocket.
But again, as he says, failure to take risks is failure to enjoy the romance of life!
KENYANS, WHAT SCREWS US UP!
Mind Revolution Thats what we need
What prompts and constitutes a revolution is bent on matter of outlook and modification of exiting values since more modern examinations of its causes reveals that it owes largely to stale ideological system of ideas and severe deprivation of governments indifference and callousness towards human suffering amongst the destitute segment of the population.
In truth, with all liberty of conscience and freedom of thoughts, it is of my opinion that we should be moving towards a paradigm of cooperative production which if properly harnessed could lead to a co-production revolution. A difference in definition and approach gives rise to the explanation that at a particular time, we are heading for a destination not to protest economic and political failure, social ills and individual plight but seek reform that a revolution is the most effective means to achieve as sequentially stated, economic, political, social and consequently individual change. To take on popular dimensions of the revolutionary trend, seizure of power, undermining of authority, massacre, political protests and imprisonments are on most cases usually thought to bring about an essential change but a refined ideology and mind metamorphosis are the prescriptions for that change.
As I have asserted, it must be remembered that the revolution of the mind has the highest chance of occurring solely on the grounds of innate change, consciously, in a subliminal sense or otherwise even if a major drawback of this innovation is predicated upon the assumption that human nature is weak, mankind is essentially selfish, the mind is unwilling and the purpose of life is a search for personal stability and order, we can promote justice, strengthen the government through a change in ideology which remains a fulcrum to which all other developments are patterned on, though most of them are fundamentally political, individual hunger for pursuance of goals with determination and a long term perspective can help effectuate this change. Inevitably true it is when it said that we humans are capable of undergoing a transformation in life since nature itself has compelled to move forward and not to remain static.
It is quite doubtable that a society can be built anew through revolutionary ideology, institutional change and self induced measures but we cannot completely sweep away the old idea and begin something new as a liberal solution. The usual analogy I can make to buttress the fact is that of a house, “The present occupant (we) can renovate, alter and add new wings but if an attempt is made to remove the foundation, the whole structure will collapse and the ideological configuration scattered. We can re-organize ourselves and effectively control circumstances with carefully nurtured minds and every ounce of wisdom. It is certainly within our power to do so when a popular movement which involves a mass mobilization and positive transformation occurs when we visibly see a reform is necessary. The mind is a terrible thing to waste so all we need is a collective cooperation that will offer the best revitalization that is yet to be proposed by anyone by producing a profound change at great speed.
In addition to the data developed, it is clear that a society that lacks ideologues is doomed unless there are individuals who are ideologically balanced, change and development will be merely possible hence the future therefore holds a promise for the ideologue that which heaven holds for the devoted Minded Individual.
Beer contains female hormones!
Beer contains female hormones!
Last month, Wits University and RAU scientists released the results of
a recent analysis that
revealed the presence of female hormones in beer.
Men should take a concerned look at their beer consumption.
The theory is that beer contains female hormones (hops contain
Phytoestrogens) and that by drinking enough beer, men turn into women
.
To test the theory, 100 men drank 8 pints of beer each within a 1 hour period.
It was then observed that 100% of the test subjects :
1) Argued over nothing.
2) Refused to apologize when obviously wrong.
3) Gained weight.
4) Talked excessively without making sense.
5) Became overly emotional
6) Couldn't drive.
7) Failed to think rationally.
8) Had to sit down while urinating.
No further testing was considered necessary.
Send this to the men you know to warn them about drinking too much beer!
Great news: Buy Kenyan airtime online at a discount!
All you need is a VISA credit or debit card. You simply need to select a product (they do have Safaricom, Zain, Yu and Orange airtime with denominations as small as 100 bob), add it to your cart, and checkout. The PIN delivery is automated and instant upon successful payment.
Saving money online |
Mobile phone operators may also make online credit/debit card purchases of airtime possible in the near future, as is the case in several other countries across the world.
What do you think? Does this new site have the potential to become a success?
Matatu IPO
The promoters, PSV Investments, say they have already investment in PSV’s commonly known as matatu’s through transport companies, savings & credit societies (SACCO’s), and individual owners. They are selling 6 million shares at 100 shillings each, with a minimum investment of 5,000 (~$62) for individuals and 100,000 (~$1,250) for institutions, and the Vice Chairman is Dickson Mbugua who’s often on TV defending the Matatu Industry as an official and a spokesman. It opened on May 17 and closes on July 3.
The PSV business is one which has had difficulty getting organized investments because if the poor reputation of the business. This is because of the reckless driving habits of drivers, gangs involved in management, insurance claims & losses.
(this matatu ran me off the road this morning, and I had to drive on the pavement to avoid an accident)
Nevertheless matatu owners are able to obtain loans from some banks but who limit their exposure by financing less than they would for an individual e.g. where a bank may finance 80% or higher of a vehicle cost, for a matatu that’s only about 50% with the owner paying the different. In some cases they also shorten the repayment cycle to weekly installments, instead of monthly, to prevent diversion mismanagement of cash as a matatu generates (and spends) most of is cash on a daily basis.
SACCO’s have a reputation for running the best matatu business, and listed transport company, Express Kenya, has also invested in the PSV business via KBS and Citi Hoppa, as detailed at last year’s invested in PSV business, as discussed at their 2009 AGM.
Private placements are riskier in terms of entry and exit, and I’m dealing with two unique placement cases now: one with an investor who wants to exit from a minority shareholding, but at a greater price than the majority shareholder will pay and another placement in which the promoters have been incommunicado for six months after urging investors to buy into a company. It’s not clear if the CMA is aware of this or if there is a transaction advisor or prospectus for the company.
2 Biggest Reasons Business Start-Ups Succeed
I was reading some articles recently about the top reasons why businesses fail and when I couple that with what I’ve learned from all my interviews with experts I would say without a doubt the 2 biggest factors to business success are;
NOT FRONTLOADING
1) Typically successful launches don’t front load.
Statistically, the biggest failures in business are restaurants and contractors. The reason is simple. Much of what they do relies on market forces beyond their control and when times get tough they still have huge overhead to carry which are major impediments to scaling down quickly. Especially in the case of restaurants. They have to carry the overhead constantly whereas at least a contractor can start to back away from capital intensive projects when he or she senses a need to do so. Of course this depends completely on what type of contractor they are. Manufacturing missiles during a cold war isn’t near as lucrative as it is during actual war. Being halfway through a hi-rise condo project when the economy falls apart however could cripple any entrepreneur no matter how revered they are – can you say Donald Trump?
PERSONALLY ATTACHED TO THE IDEA
2) Successful entrepreneurs like what they are doing and feel it matters in the grand scheme of things. This is the wild card component, the human side of business. Without getting some worth out of what you do, you will make the other dozen or so mistakes cited as reasons for business failure in my upcoming blog post – “The Dirty Dozen” The 12 Biggest Mistakes Entrepreneurs Make When Starting A Business.
As I see it here today, these are the 2 biggest reasons businesses succeed or fail in the long run. Sure, there are a bunch of off shoots but these really seem to be the main 2 components that dance so closely to both success and failure.
For more information Visit http://www.youngentrepreneur.com/business-coaching/2-biggest-reasons-business-start-ups-fail/
Drive to improve Kenya Internet content
The main purpose of this grant is to propel the emergent lucrative but yet underexploited local content industry to growth. The grant which targets the local content developers including software developers, film, animation, advertising, publishing, gaming and education professionals and all content creators, will provide the funding required for the development of quality applications relevant to the Kenya government and private sector.
Digital content, a major contributor and driver of economic growth in developed countries, can be broadly categorized as content accessed from electronic devices like personal computers, game consoles, mobile phones and digital TV. The internet offers the most common form of distribution of digital content. Digital content can include anything from internet based marketing, gaming, online education content and services.
Worldwide, digital content activities are transforming traditional industry structures and business models. Local examples include mobile payment systems like M-Pesa and Pesa Pal and government e-services like online PIN registration. Thus the digital content industry has vast potential as a major contributor to our economy and society through employment creation, capital investment and export earnings, provision of skills and capabilities to traditional as well as new and emerging industry sectors. At the same time it is also significant as a means of expressing Kenya’s unique cultural identity.
With over 3.4m users of the internet in Kenya, research indicates that the importance of the internet outstrips those of several key developed countries. Even so, the latent demand for local content is underlined by the fact that surveys show that lack of local content is the main reason many Kenyans shy away from accessing the internet. On the launch of the grant facility, the CEO, Kenya ICT Board Paul Kukubo, commented: “We are pleased that we are launching this grant at a time that the ICT industry is growing and access to the internet all over the country has vastly improved. The future for content industry is bright. Talent, creativity and skills are key drivers of competitiveness in the content sector and we expect that this grant will enable Kenyans everywhere to develop world class locally relevant content and get this industry to rapidly match the lucrative opportunities for talented content developers in developed nations.”
Kenyan content developers have already demonstrated their ability to be innovative, creative and entrepreneurial in their creation of content that is relevant to our people. The increase in locally developed software applications, websites, films and animation has been extraordinary over the past few years. However, despite evidence of commercial potential, it is not currently competitive in attracting funds and investment capital. This content grant will give content creators in the country a chance to demonstrate their talent, in both the artistic, social and business environment and propel investor confidence in the sector in the long term.
Speaking at the press conference, the Deputy CEO, Victor Kyalo commented, “It is important that with the landing of the fiber optic cables that we as a country produce local digital content, not just ‘access’ other peoples content. It is very positive that Kenyans embrace and appreciate ICTs, but more important is that there are more Kenyan made e-products available in the market. We want this grant to motivate the local content creators and software developers to originate, create, and adapt quality content that the country needs .We intend this content grant to be a driver for the long term development of content and recognize that private and public sector need to pool resources to meet the capacity challenges this lucrative sector faces.”
The Government attaches high priority to addressing skills shortages because of the threat they pose to productivity and economic growth. To address this, the Kenya ICT Board has a number of initiatives purposed to build skills in the ICT sector. Among these are a Centre of Excellence for the BPO sector, an incubation program for software developers and a software certification standard that will give international accreditation and competitiveness to our local developers. Additionally, the board is creating organic growth within the ICT sector by training entrepreneurs (over 1,000 already trained) to run digital villages all over the country. All these coupled with the improved infrastructure, has put Kenya in the forefront of potentially explosive growth in the content and software development sub-sector.
About the grant
The content grant is divided into two major sections: USD1.5m for private sector applications and USD2.5m for government applications. The latter will be used to propel the utilization of ICTs to improve government service delivery. The government has in the past few years firmly embraced ICT to become more efficient and responsive in the delivery of its public service, from processing ID cards, driving licenses, registration of companies, revenue collection and currently, the digitization of records at the Ministry of Lands and the judiciary, with more government departments to follow. This is all in line with Kenya’s vision of becoming a globally competitive and prosperous nation with a high quality of life by 2030.
The private sector grant of USD1.5M is open to firms and individuals to develop applications that would be of benefit to the general public or improve the delivery of existing private sector services.
The first round of grant allocation will award a maximum of USD50,000 per firms and USD10,000 for individuals. The Kenya ICT Board expects to make at least one call for application per year over the next three years.
The content funded by this grant will build capacity within the ICT sector create efficiencies, build social capital, increase utilization of ICTs by local communities and demonstrate to the world, Kenya’s talent for creation of digital content.
Key dates
- Call for proposals: 2 June 2010
- Deadline for proposals: 19 July 19, 2010
- Successfully grantees announced: 15 August 2010
- Disbursement of grant money: October 2010
www.ict.go.ke/
http://www.capitalfm.co.ke/business/Kenyabusiness/Drive-to-improve-Kenya-Internet-content-4263.html
http://www.ratio-magazine.com/201006023230/Corporate-Press-Releases/Kenya-Press-Releases-Kenya-ICT-Board-Launch-USD4m-Content-and-Applications-Grant.html
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STARTING A BUSINESS: THE IDEA PHASE
You know you want to start a business, but what do you do next? Here's how to find the perfect idea for your business.
Many people believe starting a business is a mysterious process. They know they want to start a business, but they don't know the first steps to take. In this chapter, you're going to find out how to get an idea for a business--how you figure out exactly what it is you want to do and then how to take action on it.
But before we get started, let's clear up one point: People always wonder if this is a good time to start their business idea. The fact is, there's really never a bad time to launch a business. It's obvious why it's smart to launch in strong economic times. People have money and are looking for ways to spend it. But launching in tough or uncertain economic times can be just as smart. If you do your homework, presumably there's a need for the business you're starting. Because many people are reluctant to launch in tough times, your new business has a better chance of getting noticed. And, depending on your idea, in a down economy there is often equipment (or even entire businesses!) for sale at bargain prices.
Everyone has his or her own roadblock, something that prevents them from taking that crucial first step. Most people are afraid to start; they may fear the unknown or failure, or even success. Others find starting something overwhelming in the mistaken belief they have to start from scratch. They think they have to come up with something that no one has ever done before--a new invention, a unique service. In other words, they think they have to reinvent the wheel.
But unless you're a technological genius--another Bill Gates or Steve Jobs--trying to reinvent the wheel is a big waste of time. For most people starting a business, the issue should not be coming up with something so unique that no one has ever heard of it but instead answering the questions: "How can I improve on this?" or "Can I do this better or differently from the other guy doing it over there?" Or simply, "Is there market share not being served that makes room for another business in this category?"
Get the Juices Flowing
How do you start the idea process? First, take out a sheet of paper and across the top write "Things About Me." List five to seven things about yourself--things you like to do or that you're really good at, personal things (we'll get to your work life in a minute). Your list might include: "I'm really good with people, I love kids, I love to read, I love computers, I love numbers, I'm good at coming up with marketing concepts, I'm a problem solver." Just write down whatever comes to your mind; it doesn't need to make sense. Once you have your list, number the items down one side of the paper.
On the other side of the paper, list things that you don't think you're good at or you don't like to do. Maybe you're really good at marketing concepts, but you don't like to meet people or you're really not that fond of kids or you don't like to do public speaking or you don't want to travel. Don't overthink it; just write down your thoughts. When you're finished, ask yourself: "If there were three to five products or services that would make my personal life better, what would they be?" This is your personal life as a man, woman, father, husband, mother, wife, parent, grandparent--whatever your situation may be. Determine what products or services would make your life easier or happier, make you more productive or efficient, or simply give you more time.
Next, ask yourself the same question about your business life. Examine what you like and dislike about your work life as well as what traits people like and dislike about you. Finally, ask yourself why you're seeking to start a business in the first place. Then, when you're done, look for a pattern to emerge (i.e., whether there's a need for a business doing one of the things you like or are good at).
They Delivered
Here's a business startup story that's a great example of seeing a need and filling it. Entrepreneur magazine is located in Irvine, California, a planned community. Many years ago, there weren't many fast-food restaurants in the business area. Most were across town, where the neighborhoods were. Two young men in Irvine found this lunch situation very frustrating. There weren't many affordable choices. Sure, there were some food courts located in strip centers, but the parking lots were really small and the wait was horrendous.
One day, as they were lamenting their lunch problem, one of them said, "Wouldn't it be great if we could get some good food delivered?" The proverbial light bulb went on! Then they did what many people don't do--they did something about their idea. Coincidentally, they purchased one of Entrepreneur's business startup guides and started a restaurant delivery business.
To date, their business has served more than 15 million people! It's neither a complicated business nor an original one. Their competition has gotten stiffer, and yet they're doing phenomenally well. And it all began because they listened to their own frustrations and decided to do something about them. Little did they know that research cites the shrinking lunch hour as one of the biggest complaints by American workers. Some only get 30 minutes, making it nearly impossible to get out, get lunch and get back on time. So while these young entrepreneurs initially thought they were responding to a personal need in their local area, they actually struck a universal chord.
That is one way to get ideas--listening to your own (or your co-workers', family's or neighbors') frustrations. The opportunities are all there; you just need to search them out. If your brain is always set in idea mode, then many ideas may come from just looking around or reading. For instance, if you had read an article about the shrinking lunch hour, and if you were thinking entrepreneurially, you would say "Wow, maybe there's an opportunity there for me to do something. I should start researching it."
Inspiring Moments
Inspiration can be anywhere. Here's another classic startup story: Ever get charged a fee for returning a video late? Bet you didn't do anything about it. Well, when Reed Hastings got a whopping $40 late charge, instead of getting mad, he got inspired. Hastings wondered "How come movie rentals don't work like a health club, where, whether you use it a lot or a little, you get charged the same?" From this thought, Netflix.com, an online DVD rental service, was born. From its start in 1999, Netflix has grown into a big business with revenues topping $1.3 billion.
Getting an idea can be as simple as keeping your eyes peeled for the latest hot businesses; they crop up all the time. Many local entrepreneurs made tons of money bringing the Starbucks coffeehouse concept to their hometowns and then expanding from there. Take Minneapolis-based Caribou Coffee. The founders had what they describe as an "aha moment" in 1990, and two years later launched what is now the nation's second-largest company-owned gourmet coffeehouse chain. Other coffee entrepreneurs have chosen to stay local.
And don't overlook the tried and true. Hot businesses often go through cycles. Take gardening. For the last few years gardening products and supplies have been all the rage, but you wouldn't consider gardening a 21st century business.
In other words, you can take any idea and customize it to the times and your community. Add your own creativity to any concept. In fact, customizing a concept isn't a choice; it's a necessity if you want your business to be successful. You can't just take an idea, plop it down and say "OK, this is it." Outside of a McDonald's, Subway or other major franchise concept, there are very few businesses that work with a one-size-fits-all approach.
One of the best ways to determine whether your idea will succeed in your community is to talk to people you know. If it's a business idea, talk to co-workers and colleagues. Run personal ideas by your family or neighbors. Don't be afraid of people stealing your idea. It's just not likely. Just discuss the general concept; you don't need to spill all the details.
Just Do It!
Hopefully by now, the process of determining what business is right for you has at least been somewhat demystified. Understand that business startup isn't rocket science. No, it isn't easy to begin a business, but it's not as complicated or as scary as many people think, either. It's a step-by-step, common-sense procedure. So take it a step at a time. First step: Figure out what you want to do. Once you have the idea, talk to people to find out what they think. Ask "Would you buy and/or use this, and how much would you pay?"
Understand that many people around you won't encourage you (some will even discourage you) to pursue your entrepreneurial journey. Some will tell you they have your best interests at heart; they just want you to see the reality of the situation. Some will envy your courage; others will resent you for having the guts to actually do something. You can't allow these naysayers to dissuade you, to stop your journey before it even begins.
In fact, once you get an idea for a business, what's the most important trait you need as an entrepreneur? Perseverance. When you set out to launch your business, you'll be told "no" more times than you've ever been told before. You can't take it personally; you've got to get beyond the "no" and move on to the next person--because eventually, you're going to get to a "yes."
One of the most common warnings you'll hear is about the risk. Everyone will tell you it's risky to start your own business. Sure, starting a business is risky, but what in life isn't? Plus, there's a difference between foolish risks and calculated ones. If you carefully consider what you're doing, get help when you need it, and never stop asking questions, you can mitigate your risk.
You can't allow the specter of risk to stop you from going forward. Ask yourself "What am I really risking?" And assess the risk. What are you giving up? What will you lose if things don't work out? Don't risk what you can't afford. Don't risk your home, your family or your health. Ask yourself "If this doesn't work, will I be worse off than I am now?" If all you have to lose is some time, energy and money, then the risk is likely worth it.
Determining what you want to do is only the first step. You've still got a lot of homework to do, a lot of research in front of you.
HOW TO START A BUSINESS FROM SCRATCH
Are you driven to create the new business that you have been thinking about or are you just bored with your job and think that a new business will be less work?
Okay, so you have a great idea for a business start-up, but how far are you willing to go to make that idea for your new business into a money maker as opposed to a dream?
There are many questions that you have to ask yourself when you decide to Start your own business. You have to be totally committed to the idea and willing to work through any problems. If you think that your startup small business is going to be easy, think again. It is difficult, but rewarding at the same time. You have to be prepared to meet any and all challenges that lie ahead or your business will not be a success.
When you have your own small business, expect to work hard and long hours to get your business going. You will be on your own, without anyone holding your hand along the way. The profit that you expect to make may very well be in the future as most businesses do not turn a profit in the first year. But, if you are strong willed and determined to succeed in your business, you will be successful.
Running your own business start-up is not only financially rewarding, but personally gratifying. You are working for yourself, to make yourself rich instead of working to make someone else money. Those who are the most successful in the United States are those who have an entrepreneurial spirit. There is an old saying – “You never get rich working for someone else.” This is true. If you want to be truly successful, you have to have the gut to start up your own business, but be prepared to take on the challenges as well as reap the rewards.
Commitment is key to being successful in your own business. Before you start looking for business finance, be sure that you are totally committed to success. You need to be committed and passionate about your business idea and be willing to give it most of your time. You should start a business that you love, that you will want to continue to work on because you believe in the idea and the need for the business. Remember – if you are doing something that you like, you will never really work a day in your life. Those who succeed in their own business love the business that they are in and enjoy the work that it takes to build the business idea into reality.
Before you start your own business, ask yourself these questions:
- - Can you put in the time it will take to make your business successful?
- - Are you able to take on the challenges of a new business?
- - Do you have people who will stand behind you with your new business, such as family and friends?
- - Take this short quiz to see if you are the entrepreneurial type.
- - Get a hold of potential clients or customers and talk about the business to determine their interest.
- - Do a marketing study such as offering sample products or services on a trial basis to see the general interest in your business. .
- - Research your competitor’s businesses so that you can better understand your own business prospects – learn their strengths and weaknesses and see how you
can capitalize on strengths and eliminate the weaknesses in your own business.