I have zero tolerance for victim mentality. I’m very deliberate about regularly upskilling myself through reading books, learning news skills…etc
2. Mediocristan:
What differentiates high performers and mediocre people is self-pity.
3. On Measuring success:
I measure my success in the absolute, not relative to the size of the tank
4. On Tesla’s Work Culture: –
Pure hard work and intensity.
Zero tolerance for bureaucracy.
Research & Development (R&D) is non-existent but rather embedded in the work processes throughout the company.
There is a key focus on ONE goal and speed from concept to launch.
5. On Work-Life Balance:
If you work for a company that reinforces you and you know your work will create value, you will remain satisfied and extremely motivated that you hardly feel burn out.
6. On Cars
A car is the second most expensive expenditure in a household, but on average, it is only in use 8% of the time
If you own a car for 8 years, you’ll have driven it for 6 months only.
With Tesla investing in automation and self driving technologies, they are opening the door for a smarter and more efficient sharing economy in the automotive market.
6. Career Advice:
Be super deliberate about where you are. Understand the opportunity cost of where you are. Understand your true value including your weaknesses. Focus on upskilling yourself.
Inside the C-Suite is a new podcast focused on showcasing African startup stories. The series is powered by I-DEV International, Metta and the East Africa Venture Capital Association (EAVCA) with an aim of telling success stories and struggles behind Africa’s most innovative companies.
In Episode 3, we invited Ken Njoroge, CEO of Cellulant- an award winning digital payments and digital commerce service solutions provider- that recently raised a whopping $47.5M Series C round from TPG Growth’s Rise Fund. This episode provides a glimpse of an entrepreneur that has been resilient and bullish in his dream to build Africa’s largest fintech company.
Established in 2004, Cellulant is a true Pan-African tech company with operations in 11 countries and 338 employees. The company serves 94 banks and 7 mobile money platforms and supports 40+ mobile networks, 21+ mobile wallets, 600+ e-commerce platforms and 120 million consumers in Africa.
Here are my key takeaways:
Successful entrepreneurs backgrounds are erratic.
Can entrepreneurship be taught? Do successful entrepreneurs have a certain shared common history? Which characters make the best entrepreneurs? Vanity questions.
According to Ken, people have a misconception that you need to be experienced to start a business. He advises early entrepreneurs that the only validation they require will come from listening to the market, customer, and employees. Along with his co-founder, Bolaju Akinboro, he is proving that regular Africans can build a world-class business. Regular meaning never went to Ivy League Schools, never left the country, wholly bred & educated in the local system, no political connection, and no corruption.
When you have skin in the game you behave differently.
Main Hustle vs Side Hustle Dilemmas. Should I? Should I not? Brain Cell 1 vs Brain Cell 2.
It is difficult to be a master of your craft when you’re running two or more things at once. If the side hustle represents a big enough opportunity and you have a big vision, give it 100% attention.
Ken believes that the only reason he has outmatched his competition is the sheer hard work, time dedication that has gone into eliminating possible threats to the business.
Identifying a problem + Coming up with a solution ≠ Success
One key determinant of an entrepreneur’s success is their mental model. This refers to a decision-making system that embodies the thought process of how we understand the world. Mental models set the tone and approach to solving problems and executing tasks both in our personal and professional lives.
Listening to Ken, one thing that stood out is his bullishness, resilience, and vision when he encounters barriers. Throughout his entrepreneurial journey, he has encountered numerous barriers that threatened his life’s work. For example, when Chase Bank went under receivership the company took a major hit since the bank at that time was their biggest credit line. Ken had to personally dispose of personal assets to keep the company afloat.
Fundraising is a full-time job.
Never stop fundraising. You never know when the well (economy) will dry up. You never know how long it will take to close a round. You never know the opportunity cost for a lack of investment readiness.
Despite Cellulant’s popularity within the FinTech space, it took them 2 years to close their $47.5 Million Series C round. That’s 400 presentations across the world in the process approaching 60 different investors and ultimately yielding to 1 successful investment. <2% success rate.
For a CEO, there comes a phase where day to day running of the business takes a back seat and you have to trust your team to make decisions. So from the get-go, build better teams than you from the start. Be comfortable with sharing decisions. Trust that growth (shared decisions) makes you a little bit more resilient because there are more people interested in solving the problems of the business.
Learning how to articulate yourself is real value on the table.
Unfortunately, Kenya’s and many African countries’ education systems do not appreciate, encourage and support storytelling. Just how far can memorizing take you in the investor round table?
Ken believes a lot of Kenyan entrepreneurs lack storytelling skills. In fact, he adjudges himself as having been poor in the initial years and having had to invest in up-scaling himself to become a much more effective entrepreneur. He believes if he went back to the same 60 investors, he would close a 50% higher valuation.
Securing partnerships is the fastest way to accelerate your business.
It allows businesses to work cooperatively to further their self-interested goals, and in the process, share their risks and rewards.
Companies can’t always rely on their own internal capability to create value. Sometimes, it makes more sense to find a partner. Other times, it is perhaps the only way to achieve a specific end goal.
For resource-strapped and next mile focused startups, corporate partnerships signal a silver bullet for growth. A possibility of leveraging a plethora of resources, riding on an established brand and accessing a latent customer base.
That possibility, though elusive, can create an enamoured feeling. A feeling, if not kept in check, can lead to a slippery slope.
This essay attempts to clear up some blindspots for startups entering partnerships with corporates.
Partnership Cues
The best things in life happen in clusters. That’s why the success of any business is pegged on its ability to create cooperative networks. These networks consist of customers, distributors, suppliers, investors and the government. But what makes one a partner?
A partnership is a sharing relationship that is not purely transactional. It is built on the combinations of value from businesses, which don’t depend on paying each other for a service. Often the key drivers of a true partnership include:
Acquisition of resources.
Optimization & economy of scale.
Reduction of risk & uncertainty.
While these benefits would be welcome in any business, not all partnerships achieve this end goal. Certainly, not the wrong partnerships. So, just how do we gauge the right ones?
Defining intent should be the starting point for determining whether you’re best suited to execute alone or through a partner. This can be achieved by running your business model through a partnership intent puzzle.
Value Chain Generation by Bart Doorneweert
If your genuine answer is ‘no’ to one of these questions, that could be an early sign for the need to explore a partnership.
Backward Induction
A partnership is a parallel of two or more business models. The sooner you understand your intended partners’ model and how it aligns with yours, the easier it will be to come up with a winning pitch.
The partnership canvas, a prototyping tool for modeling key business partnerships, will help you judge the potential from the onset.
Created Value: What output will be created for your business?
Desired Value: What are you looking for in a partner?
Transfer Activity: How will you bring together these values?
Value Offer: What is your matching offer?
The crux of a partnership design is value creation and transferability. Your value offer is your contribution to the partnership. The desired value encapsulates your expectations for your partner(s). The transfer activity represents the barter trade zone between the parties. Lastly, the created value is the litmus test of the newborn value.
It is relatively easy to spot constraints, identify opportunities across the supply chain and generate subsequent partnership focused solutions. The main drawback of a partnership design process often lies in the transfer activity block.
Just like in bartering, there must be a coincidence of wants. The flipside is that people have different valuations for the same offering. And to add to the complexity, no one party puts in an equal measure of value on the table.
Ensure the end goal is worth navigating this complexity. More importantly, ensure the intent is customer centric.
Partnership Asymmetry
No partnership is created equal. Especially one that is between a startup and a corporate.
The principle dynamic to be aware of is who has more to gain relative to the scale of their company¹
Brand, capital, distribution, and labour leverage are owned by the corporate. Startups have the leverage of ideas and innovative products with no scale [yet].
As long as you stand to gain more than the corporate, they have the leverage.
The small fish is friendlier. (Icons c/o FreePik)
To mitigate a raw deal
Be so good that they can’t ignore you. This means avoiding corporate partnerships in idea or pre-chasm stage when potential is all you got. Potential is a high-risk return ratio for the corporate and high-risk of replicability for you. Give yourself a chance. Convert the potential to an incentive. An incentive would make them more motivated to seal the deal and sustain it. Additionally, it would also dampen their chances of going out SOLO. And in the case, things go sideways, you want to give yourself a head start to the market. You also want to build that innovation identity clout in the ecosystem- assign a face to your product for everyone to see.
Show them their competitive advantage. Partnerships will always be a driver for corporates to further their self-interested goals. That said, corporates’ main focus is on their competitors- other large companies. Nothing speaks louder than showing them how to increase their competitive advantage.
Use FOMO. Fear-of-Missing-Out is a high stake game. If corporates don’t act on new technologies, business models and technologies, they’ll miss out on valuable growth opportunities. Being left out of the innovation table is one of their deep-lying fears for the future. The line chart would be along the lines of “this is how much money you stand to make and this is how much money you stand to lose” if you don’t capitalize on the opportunity. Plain simple.
Exploit the inflection point. All companies experience a decline in their business lifecycle. This stage can only be pushed further away through innovation. The R&D department might save the day on a couple of occasions, but they won’t always turn up with all the answers. Shockingly, it takes some companies’ an awfully long time to figure out that they can’t always rely on their internal team. Luckily, their bottom line will always give them that wake-up call. And this is where you come in. Your innovative products and understanding of their target audiences will be a high yield opportunity that they can’t dare pass out on.
Pruning Naivety
Truth is, partnerships between corporates and startups rarely work. And the few that have passed through the seal of a pen, haven’t quite lived up to expectations.
Sometimes you just have to wait for the industry to mature. For corporates, to start feeling the pinch of technological evolution. For the bottom line to veer a bit off course for their liking. Holding the line is sometimes the solution. Chartering your own path is another.
Sometimes it is just unrequited love. A relationship founded on onerous terms. To charter a successful partnership, you need to put up measures to avoid failure. Legal traps. Irreversible traps.
History is your friend. There have been others before. Use their experience to your advantage. Always assume that
They could be a competitor waiting to happen.
They might use you as a guinea pig for their next product.
You could just be part of their optics or PR budget spend.
Long term partnership is not guaranteed. They change with the tide.
They will not have the same urgency as you.
This will help you determine information you can share, situations you can negate and opportunities you can capitalize on.
Pitching to Signing
Cold pitching almost never works. A warm referral is your best chance of getting into the room. If you can’t get a referral, work your way up, network and find people who know people that get you inside that door.
Joan Kelly famously said, “Before going into a partnership with someone, spend time with them in three different kinds of situations: a relaxing one, a competitive one, and an intellectually stimulating one.”
When done right, partnerships can be a boon to both startups and corporates. They provide linkages to resources, close knowledge gaps and allow cross-functional value creation. These sweet spots can only be achieved if there is a mirrored connection between the parties. A connection that needs to be probed through a partnership design process.
In the end, it is the human relationships and working camaraderie that make partnerships last.
