April 19, 2013
March 20, 2013
Updated on April 6 2013 to include a reference to a recent article
One of my very favorite documentaries ever is Startup.com. This is the story of Kaleil Isaza Tuzman and his best friend Tom Herman and their start-up experience during the dot com boom to bubble in the late 90's. Kaleil and Tom went from getting a few thousand dollars in startup funds from family members to raising $60 million dollars in venture capital. Their startup grew at a phenomenal rate but eventually crashed. Total failure. The documentary chronicles the rise – and eventual fall – of these entrepreneurs in real time.As for me, whenever I feel down and out, I like to experience success, even if it is vicariously through a movie. This helps give me the energy I need to overcome my own psychology and to see failure for what it is: another step towards success.
I had just launched my own company around the same time as the documentary was filmed and I was so excited about the idea of watching the full story of a startup that when the documentary came out, we rented out an entire small theater in the US and invited all our employees, friends and families to watch it. I keep the documentary on my tablet and I watch it again every time I feel like getting inspired. Yes, inspired.Almost every entrepreneur experiences failure. And although there have been countless articles about the benefits of failure the reality is that when your startup fails, you feel like a failure. You have let down people who trusted you, sometimes with their money, you have let down your employees and partners, you have let yourself down and even your dreams. And as many times as you read an article about how failure is good, at that moment you feel like your world has ended.The worst part about failure for an entrepreneur is what it does to your self-esteem. After all, it is because you believed in yourself that you got as far as you did. When you start questioning yourself, wondering if you are really worthy of being an entrepreneur, it becomes very hard to start a new venture or to look forward to a new project.Advice from friends and family rings hollow: "You will recover from this." "You will build an even bigger startup." While you are asking yourself, how do I recover from what feels like a tsunami? You feel as drained as a wrung-out wet rag.The reality is that some people don't recover. I might venture to say that most don't recover. That is, they don't go on to build a bigger, better startup or any startup at all; they don't ever develop any idea that gains any traction, and they disappear into the oblivion of 'employeedom'.But those who do recover, those who do find the inner strength to believe in themselves once again, those who rise to fight another day, well they are the ones that are able to translate failure into success. Many people will say that failure teaches you all the lessons you need to start afresh. But what they forget to tell you is that you need to move beyond the lesson that you are a screw-up. This is a psychological battle with yourself that is key to rising again.I have met many entrepreneurs that never got over the psychological effect of their failure. They knew all the lessons, and if they could do it over they would certainly apply these lessons to the new venture. But they never got a chance to do so because they couldn't find the inner strength, the self-confidence, to take a shot at starting again.So how can failure be inspiring? When you see someone get over that hump; when you hear that story of psychological victory over oneself. When someone shows you that despite what seems to be an insurmountable loss, their dream is still alive. Because then you begin to think, if they can overcome, then I can overcome; and your own journey through recovery begins.
Kaleil I.TuzmanBack to Startup.com, Kaleil and Tom. You see, their startup was a failure, yes. But Kaleil is a great example of turning your failure into success. He has overcome the psychology and has gone on to launch successful startups. His story continues to be an inspiration. When you watch the documentary, even during the worst of times, you just know he will make it. Tom? …well he did get the lessons down.
Update: just two weeks after I published this post, I came across this article about an entrepreneur who didn't recover from failure. It is heartbreaking and food for thought.
….Despite his many friends and backers, Sherman ultimately bore the burden of Ecomom's success or failure alone.....
Read the full story: The Story Of A Failed Startup And A Founder Driven To Suicide….In the past, failure was very contained," another entrepreneur said. "When you failed, you felt bad around your family, the people you raised money from, but it wasn't as public. Failure in an era of social media and social video and global events is a very public thing….
Sad example of one entrepreneur who couldn't overcome his psychology...
April 13, 2011
Burundi (137th) and Chad (138th) were the worst ranked of all countries on the list.
Rwanda, which probably would have fared pretty well within Sub-Saharan Africa, was not ranked. This is rather strange since Rwanda’s ICT efforts are mentioned in the report. Moreover, Rwanda’s government has set the country on a fast-lane to technology growth.
The ranking holds some surprises. The Gambia and Senegal rank higher than Kenya even though Kenya did rise 9 places since the 2010 report. Hmmm. How much did The Gambian and Senegalese governments pay? :)
Here are the rankings of Sub-Saharan African countries
|Kenya||81||up 9 spots since 2010|
|Namibia||82||up 7 spots since 2010|
|Malawi||105||up 14 since 2010|
|Mozambique||106||up 10 since 2010|
|Uganda||107||up 8 since 2010|
April 7, 2011
Africans can create hugely successful tech products that will sweep the world off its feet. There are several entrepreneurs out there waiting to break through, but their ideas might never see the light of day because of a lack of seed finance. This is the reason Africa might never produce a Facebook, Groupon, Zynga or Google: There are no venture capital firms in Africa to fund these ventures.
Nsehe is right. When it comes to African technology, there is no, or little venture capital available to African entrepreneurs. The financing that is available generally comes from “social’ or ‘development’ type funders, not from venture capitalists wanting to get a huge return on investment. As a result, the funding comes in very small increments of $10,000 to $25,000. This is a lot of money in Africa but it cannot help African innovation compete at a worldwide scale.
Ushahidi is a perfect example of this. This revolutionary technology, whose founder is Kenyan woman entrepreneur Ory Okolloh (pictured). The technology has received worldwide acclaim and has been used around the world. But their funding mostly came from this social/development community. In fact, the funders listed on the Ushahidi web site almost all end in “Foundation.”
Sure, you could argue that Ushahidi has a “social benefit” aspect to it and therefore, it is normal that the funding would come primarily from the development or social funding community. But I wonder if the funders’ list had been different, if the technology could not have evolved into a profitable business venture as well.
A few years ago, I ran into a VC firm that had raised money from Vivendi and other big players. Their sole objective was to fund African technology. This was exciting. However, they were only interested in these mom and pop tech firms that had a ‘social’ benefit. The VC firm soon disappeared.
As an African woman, it is worse. You say funding, and the automatic reaction is “Micro-Finance,” a real pet peeve for me. As if African women entrepreneurs were incapable of managing anything more than a $50 loan. (Don’t let me get going on the women and finance thing here…). Development, social and micro-finance are not evil. They have their role and do help keep millions out of poverty. But Africa cannot develop by simply trying to not be poor. We need real multi-million dollar financing for African innovation. Is there risk? Of course there is, but no more than funding an online pet shopping site in Silicon Valley.Mfonobong Nsehe
April 5, 2011
One Day Without Shoes is a global event designed to encourage people to go barefoot for a day to draw attention to the plight of children in developing nations who face injury, illness and missed opportunity because they don't have adequate protection.
The idea about walking barefoot in support of poor kids who can’t afford to wear them doesn’t sound so bad but who is it helping? There might be a feel good factor but in all honesty, if this had come up on April 1, I would have sworn it was an April Fool’s joke. Arianna Huffington, with a very serious face, explains how you will ‘raise awareness of the millions of children who have to go barefoot.’ Really – that is the whole point of the campaign. Here is the video:
OK. Now there will be million more kids going around barefoot in the halls of AOL, Microsoft, TOMS and shopping malls. The only awareness it raises is that of how silly we can be under the pretense of ‘helping people.’
Worse is the amount of money it looks like they spent on the campaign. I don’t have the dollar amount but they have a dedicated web site, iPhone and Android apps, lots of tools, resources and advertising. The hundreds of thousands of dollars spent on this meaningless project could have financed thousands of mobile phones for poor kids and that would have made a real difference in their lives. TOMS says that if you buy shoes from them, they will ship shoes to the poor. Thousands more dollars for shipping costs for ridiculously expensive shoes when you can buy lower cost shoes in these poor countries and support local entrepreneurs.
Others have also reacted negatively to the Day Without Shoes campaign including Gawker Put Your Shoes Back On, Privileged Techies:
No one's saying this isn't a laudable cause. What sort of cold-hearted bastard could be against shoes for poor kids? But the implementation looks like something out of an Arrested Development episode. Maybe, instead of exposing their bare, sweaty feet to whatever microbes have accumulated on their office floors or even—and we shudder to think about this—New York City sidewalks, AOL and Google employees could do slightly more good for the world's teeming, shoeless masses by instead redirecting a small portion of the resources used to fund their $1,000 cash bonuses and 10 percent raises, multi-million dollar stock grants, or company-sponsored human servants.
So ill-conceived was this initiative that Good Intentions Are not Enough decided to do a counter-campaign A Day Without Dignity to raise awareness about wasting good intentions. They have a whole list of suggestions on their site for promoting their own counter-campaign:
On or around April 5th – the same date as A Day Without Shoes – we’re asking aid workers, the diaspora, and people from areas that receive shoe drops and other forms of charity to speak up in blogs, on twitter, or at school.
Someone should please tell Arianna and TOMS and whoever else is behind this thing that the idea should be to raise MONEY to fund local entrepreneurs in developing countries so that they can raise themsleves and their communities out of poverty.
March 31, 2011
I read and re-read the post by Ben Horowitz today: What’s The Most Difficult CEO Skill? Managing Your Own Psychology. I kept reading it over and over because I finally realized that I was not alone. As an African entrepreneur, I am confronted with challenges that CEOs in developed countries don’t even know exist. But they have their own challenges and in the end, the psychological ‘condition’ and the internal struggle are the same. Horowitz says:
‘The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.’
This is so true. Because who do you talk to? As well meaning as they might be, friends, even employees simply cannot understand. It is like a White person not knowing what it is like to be Black. I mean, they feel for you. Intellectually, they understand that it might be different but in the end, they really don’t know. As a result, I spare my friends and my family with the gory details of entrepreneurship in Africa and I save them for my blog.
I remember one time, I had several members of my American family together for Thanksgiving and they really wanted details about my life in Africa. So I started to tell them a story and seeing their bewildered look, I stopped and brought the story to an end. Even then, they were wondering why I just didn’t come back to the US where I could lead a more ‘normal’ life. Another time, I met with members of the World Bank’s “Doing Business” staff as they were getting background information on my country to compile their yearly report. After three hours, they looked at me and said: “Why are you still there?” A ‘normal’ person simply cannot understand what drives an entrepreneur, nor understand, as Horowitz so perfectly describes, the loneliness of being a CEO.
But my favorite quote from Horowitz’s article is:
Tip to aspiring entrepreneurs: if you don’t like choosing between horrible and cataclysmic, don’t become CEO.
I often say that leadership involves choosing between bad and worse and you will be judged on making the bad choice. Few, if any around you understand that you had few options when making an important decision or that all of your options were bad ones. In the end, they will simply conclude you made a bad choice. Having made some over the more than 11 years since I started my company, I have a soft spot for all leaders, be they business or political when people second-guess their decisions.
Horowitz ends with some nice suggestions on how to manage your psychology. His final advice:
'Don’t Punk Out and Don’t Quit As CEO, there will be many times when you feel like quitting. I have seen CEOs try to cope with the stress by drinking heavily, checking out, and even quitting. In each case, the CEO has a marvelous rationalization why it was OK for him to punk out or quit, but none them will every be great CEOs. Great CEOs face the pain. They deal with the sleepless nights, the cold sweat, and what my friend the great Alfred Chuang (legendary founder and CEO of BEA Systems) calls “the torture.” Whenever I meet a successful CEO, I ask them how they did it. Mediocre CEOs point to their brilliant strategic moves or their intuitive business sense or a variety of other self-congratulatory explanations. The great CEOs tend to be remarkably consistent in their answers. They all say: “I didn’t quit.”
I will re-read his advice every time I feel overwhelmed and the very next time I feel like a mad woman. I still think that being an entrepreneur in Africa is harder than it is in the developed world. Last week, Columbia University held its annual African Economic Forum and one of the speakers said that to be an entrepreneur, you had to be a little crazy. I responded: ‘To be an entrepreneur you have to be crazy. To be an entrepreneur in Africa, you have to be raving mad.
Well, after reading the article from Horowitz, I am still convinced that I am raving mad, but at least I know I am not alone.
February 3, 2011
October 18, 2010
What I did not imagine is that people outside of the dispute would also join in, in a kind of a multiplier effect. You are not battling against an entity or a person but battling against a system. And those who rely on that system will fight you not because they have a particular problem with you but because the outcome of your dispute might shatter their whole structure. If one individual can actually win court cases, win contracts and do business without corruption, this could encourage others to do the same and jeopardize an entire system.
I try to do what is right under my circumstances. And while I do hope that the decisions that I make will have a positive impact beyond my personal situation, I don’t have the ambition to change the whole environment. Yet, the mere sense that someone – anyone – could get around their system causes collective panic and leads to numerous forces working to protect this order of things.
As a result, just staying in a corner, trying to survive while maintaining one’s ethics and principles can be an invitation to what I call “invisible forces.” Doing the right thing is so costly, so exhausting that it becomes a luxury. Not many can withstand the barrage of assaults that result from trying to operate outside of the system, and many don’t. It is just so much easier to just go along with the flow lest one become the target for destruction.
Even though I don’t promote this openly, it is pretty well known that I don’t engage in corrupt practices. But the environment survives and thrives on corruption. As a result, I am an enemy before I even decide to enter the ring.
As I mentioned in earlier posts, my father died a couple years ago and there has been a real battle surrounding his estate. My legal status happens to make me his primary heir even though he had lots of children. To avoid any battle, I thought that it would be best to simply share equally with everyone and stay out of the courts. As rational as this might seem, it was a huge mistake.
In fact, when there the potential for a dispute, especially when it involves significant amounts of money, the system needs a battle; lawyers need to get their fees; judges need their bribes; law enforcement authorities too. Therefore, the more fights they can create and the longer they can keep them going, the more they benefit. So the various forces will actually fuel the fight – this until there is nothing left to fight over, and then they move to another case. While I have understood this, many of my siblings have not and they have fallen hook line and sinker into the system’s trap.
More importantly, the “forces” know full well that they will not benefit from me and that if I have my way, the disputes will end. So I unwittingly become the target for their attacks with my siblings used as mere instruments. Unwittingly because I chose not to engage in the battle so they brought the battle to me. My offices have been physically attacked by dozens of thugs with the police, when called, just watching as our doors were broken down and locks changed; innumerable criminal complaints have been brought against me, simply because I chose to stand up for the truth; I am on trial for purportedly being a CIA agent and there are two eviction proceedings against my company because we are “a cover for the CIA.” A local police station even issued a warrant for my arrest for “espionage,” amongst other ridiculous accusations.
Of course, these are all ludicrous and unfounded attacks and those who brought the complaints know that there is no basis for them. But because I am brought into the ring, I have to defend myself, and therefore, I have to surrender to their system.
One of the many times I had to respond to law enforcement, they straight out told me that they knew that I was really the main heir but that my half-brother had shown them money and that I should show that I have more. I walked out, suggesting that if they had anything on me, they should simply arrest me.
Last week, I received a call from a friend of a magistrate that has one of the cases; again, he stated that others had made “offers” and that he wanted to give me the opportunity to make an offer of my own, suggesting that the decision would favor the highest bidder. Again, my response was simply that the judge simply do what he thought was right; I would not be “bidding.”
Because of the legal circumstances, it is very difficult for judges to outright decide against me, or for law enforcement to charge me with a crime. However, they drag the cases or investigations for as long as possible, hoping that the pressure and the financial cost of multiple lawsuits, complaints and disruption to my business will cause me to relent.
If I have been able to withstand the attacks so far, it is only through God’s grace. This does not mean it has been easy. It has taken a toll both on my personal and on my professional life. It has also caused me to put on hold many of my projects and other more constructive endeavors. So in that respect at least, the system has been victorious. Although it has not yet destroyed me, it has limited my ability to function normally – meaning against the system's interests.
I am an optimist and believe that good overcomes evil. I cannot allow the system to change what I believe in or to dilute my principles. I might lose a lot in a material sense but at least, I will maintain the very essence of who I am. This doesn’t sound very pragmatic but as some say, “pragmatism is the enemy of principle.”
July 16, 2010
The case reeked with corruption from day one. The judge in the original case even mentioned to us that “If I were a judge in a bigger city, you would need to pay $10,000 (equivalent) just to talk to me.” He added that if we heard that he had met privately with our opponents that we should know that he is open to meet with everyone (for those not used to corruption lingo that means “I am open to an offer from you if it is better than theirs.”) We were naïve and had not understood the message. In any case, he rendered judgment against us without any basis in law or fact. After the judgment, he suggested that we should find a suitable settlement amount. We chose to appeal.
To handle the appeal, we so distrusted the lawyers in that area of the country that we decided to retain a lawyer in Europe who was also a member of the local Bar Association. We were right to do so. While preparing the appeal, our lawyer discovered that our counsel in the lower court case had actually been the lawyer for the opposing side during the period the case had been hidden from us! This had never been disclosed by either the lawyer or the judge.
During the appeal, our European based lawyer just could not understand how the judge had rendered such an obviously incorrect judgment. To assist him, he had a local partner. But he did not have full confidence in his own partner. So at each hearing, he sent us the submissions and asked us to send a representative to the court…. Just in case.
For the final arguments, our European based lawyer flew in and very eloquently pleaded our case for over an hour. The opposing counsel never said a word. Strange. The case was sent for deliberation by the panel of three judges.
Then month after month, the decision was postponed. No reason, just postponed. This went on for 8 long months. We know that long delays in rendering decisions are usually a call for the highest bidder. We also know that our opponents were willing to be very generous with judges and were not overly bothered with pleading their case or submitting evidence. Our lawyer's intense pleadings had seemed quite out of place in en environment where law and facts are not usually part of the equation.
After some time, we stopped sending our own representative to the Court because it was a waste of time and travel expenses so we relied on our European counsel’s local partner. So when a hearing was scheduled yesterday to announce the decision, we did not send anyone.
For a reason that we will better understand one day, our European counsel’s local partner decided not to show up. We had no idea therefore, if a decision had been rendered, and if so, what it was. Worse, the local partner stated that he would be unavailable to check on the decision until next week. It is important to note that the local partner is based in the area where the court is located and he could have easily sent someone or called the court to get the information .Our European based lawyer also got worried. We were afraid that judgment had been rendered against us and that the local partner was colluding with the opposing side to give them time to execute the judgment. Paranoia.
So we decided to send someone to the court today. Unbelievably, the court clerk had decided not to come to work and our file was locked in her office. Reached by telephone, she said she was “tired.” Yes, judgment had been rendered yesterday, but she could not remember what it was (our case was the most important employment case in several years..but she did not pay attention as she was writing out the decision). She asked that we return on Monday.
In a normal environment, one would just go away and come back but it our own legal system, court clerks never miss work unless they are paid to do so by a party in court’ Usually, to allow them to either execute the judgment or to allow an application for a stay of execution. (I have learned a lot since 2006).
Thinking quickly on his feet, the person we sent to the Court explained to her colleagues that he would need to send for a bailiff to record that on a business day, he was unable to obtain information on a judgment from the Court of Appeals. He said that since he had been paid travel expenses, his bosses would never believe that no one could give him the information. Within 5 minutes, the Chief Registrar called the Court clerk and she showed up 30 minutes later.
Strangely (and happily of course), the judgment was in our favor. The judgment from the lower court was set aside. We don’t know what the games were about but we will surely discover eventually. One can become so paranoid that it really could be that the local lawyer was unavailable and the court clerk was too tired to come to work. I would like to say that our mind has become so twisted that we think everyone is corrupt and the whole legal system is set against us but somehow, something still seems fishy. Update coming…
June 9, 2010
Usually though, there is some pretense that this is a real RFP and that all bidders have a chance. This way, they can justify awarding it to the “pre-selected” company by showing that X number of companies responded but none met the technical requirements.
I remember finding this out the hard way, working round the clock for weeks to finish a proposal on time, getting the bank guarantees, audited financial statements to respond to a very complex proposal. When it became clear that from a technical and financial standpoint our proposal was the best, they simply cancelled the process. When the new RFP came out, we did not meet the administrative requirements. :)
Still, even when we know we have little or no chance, we sometimes respond anyway. The process is important for our team to go through for practice and from a marketing standpoint, our company name should come out from time to time. So, when we recently saw a notice in the official newspaper for an RFP from a government owned agency for a system we have lots of experience with, we decided we would bid.
This decision was not one that the agency was very pleased with. According to the notice in the newspaper, anyone could consult the bidding document between certain hours. However, when we tried, during those very times, we were never able to see the document. The person who had the document seemed to always be gone as soon as we showed up.
Not to be discouraged we decided to blindly purchase the bidding document. The newspaper indicated a bank and account number to deposit the equivalent of roughly $50 to buy the document. So we went to the bank to make the deposit. Account number invalid. Indeed, the newspaper showed an account number with just 6 digits when all account numbers here have 13.
Then we tried to get information by attending a meeting announced in the newspaper notice for which there is a date, but no time. We sent someone who spent all day. The meeting was never held.
Finally yesterday, we were able to get the right bank account number. We deposited the funds and took the receipt to the agency to get the RFP. They are unable to give it to us because their copy machine is out of paper! I am not making this up.
We have lost already three precious weeks while the agency continues to play games with us. We are only more determined than ever to respond. Since this is a World Bank financed project, we will certainly get the RFP (which we paid for) just in time for our name to be added to the list of expected bidders but too late to obtain the required bank guarantee and to meet the other administrative conditions listed in the document.
The World Bank is meant to be a development organization but most of their funded projects are awarded through a process that is often less than equitable and is sometimes the result of blatant corruption. The World Bank seems to be aware of this. They have an elaborate system of reporting on the procurement process: http://web.worldbank.org/WBSITE/EXTERNAL/PROJECTS/PROCUREMENT/0,,contentMDK:20251613~pagePK:84269~piPK:84286~theSitePK:84266,00.html. But under what category would you put Copy machine out of paper?
May 26, 2010
March 25, 2010
I have started to put together a team and we are in the early design stages. We are designing the application as a multi-stakeholder system with access for court clerks and other court staff, judges, judicial officials, lawyers and individual parties. Initially, we will limit the application to civil cases that fall under OHADA (an organization that harmonizes business law across 16 African nations) law and extend it later to other types of cases.
We expect to be done with the first phase of the project by the end of 2010.
If you know of any similar application currently being used in an African country, can you please post a comment?
Surely, ABC is unaware that we received this quotation from his employee. The employee probably told his superiors that we no longer wanted the router or that we had purchased it elsewhere. He was quite confident that we would buy the router from him and never tell his management, an indication that he has done this several times before.
Another local IT company developed some industry specific software and customized it for their primary client. They trained their main developers extensively, even sending one to North America for classes. The client then unexpectedly decided to cancel the contract. The IT company felt protected by the fact the client would eventually be forced to honor the contract or cease operations since this was a mission critical application and they could not operate without it. Unbeknownst to them, the client had already purchased the source code from the IT company’s developer, who, with a still valid visa, had fled to North America. Given the state of the judicial system in this country, there is not much recourse for this IT company.
We complained once to our former internet provider about slow bandwidth even when there were few of us connected at once. They kept checking their system and said that we were using all of our allocated bandwidth. After an investigation, it was discovered that one of their employees had given other customers access to our bandwidth paying the employee directly for the extra bandwidth.
We have also been on the other side of employee/customer fraud. A few years ago we did some training for a very large customer. We did not get the purchase order up front since both their IT director and their training manager came to our office to confirm the training, promising to bring the purchase order during the training. Well, even after the training was over, we still had not received the purchase order. For the next year and a half we waited for the purchase order. The salesperson responsible for the deal on our side was very active in keeping in contact with the client and updating us with the internal problems the client was having, asking us to be patient. The client’s IT director also came to see us several times asking us to hang in there and that there were larger projects down the road for us if we remained patient. They were a very large customer and the potential was huge so we waited.
Eventually, we decided to send a fax to the customer’s CEO to state that we were walking away from the $26,000 in revenue and wanted them to acknowledge our “donation.” We first called his office to get his fax number. Hearing the name of our company, the secretary said that she had seen a payment document come through with our name on it. She transferred us to accounting. The accountant confirmed that she had just issued the payment. She confirmed our invoice number, the invoice description and other details, all of which were correct, then added. “We just ordered a wire transfer to your account at 123 Bank.” Well, we didn’t have an account at that bank. She insisted that the account information was on the invoice and faxed us a copy of the invoice.
The invoice had been copied exactly from the one we had submitted with one exception: the payment details were the account number of a company our salesperson had set up with the customer’s IT director! Even after the fraud was discovered, we still never got paid in full. The purchase order had been issued in the name of the other company and we had to negotiate a lower payment. As part of the agreement, we had to pay the salesperson her commission!
One of my friends also owns an IT company in this country. They have devices that secure revenues for a government agency. The devices are all connected to a server which reports on the revenues generated by the devices. One of his employees, in complicity with agency employees, took one of the devices offline. The device continued to collect revenue but none of it was reported. When my friend uncovered the subterfuge, he immediately notified the client and fired his employee. The agency had my friend briefly arrested and his employee's accomplices within the agency kept their positions! Obviously, the agency management was in on the fraud. Had my friend kept quiet, everyone would have been happy.
I am not sure what the solution is to this disease that permeates business relationships in this country. The judicial route is risky at best and no one wants to take customers to court, even when they acted improperly. You can of course fire your employee or file criminal charges for theft but you are again left to the mercy of the judicial system.
Some employees use the excuse that they are not well treated by their employers but in all the examples I listed above this was not the case. Our salesperson earned $1,000 a month before commission and had $300 in monthly telephone credit which is quite decent, especially since she was not full time. In the other cases, the employees were some of the highest paid and best treated in their respective companies, some even having company cars and expense accounts. This really just boils down to the general business climate in the country. Anything goes. There is no right or wrong, just a quick way to make money.
I feel very blessed with the staff I have right now and I am confident that they don’t engage in this type of behavior. At least… I think.
February 20, 2010
This is even when it is abundantly clear that the judge was influenced in rendering a decision. If these magistrates were “massaging” the law in an effort to be fairer than the law is, this would be legislating from the bench which is still wrong but certainly more tolerable. But fairness has nothing to do with it.
Technically, judges are independent from the government and judges seem to take this independence quite literally. They are also independent from the law; independent from the facts; and independent from any semblance of ethics or propriety.
I asked an official in the ministry of justice why it was that despite the recent anti-corruption drive in the country, no judge had ever been charged with corruption. He explained that corruption was very difficult to prove since the judge could always justify his decision by stating is was judicial error. The most the government can do is to transfer them to a less desirable court or, in very rare cases, revoke them. Basically, incompetence is a judge’s best defense.
Because there is no fear of real sanctions, most judges are not afraid to render blatantly wrong decisions. The attraction of the bribe, which amounts in many cases to more than the judge can earn in an entire career, is much more potent than the fear of being transferred to some remote town where they will be handling disputes over goats.
In fact, the amount a judge was bribed in a case is often an open secret. My father died about a year and a half ago and as in most inheritance situations, siblings have been battling each other in court. One of them convinced a judge to order a marriage certificate to be drawn up for his mother, after getting the judge to order a birth certificate be issued to him. So after my Dad died, he mysteriously reemerged to have a 50 year old son and to get married. The marriage certificate clearly states:
On this day ….[3 months after my Dad died] Before us, appeared publicly….
The judge signed and certified the birth and marriage certificates. Some of my siblings who heard about this immediately petitioned the court to have the order nullified. Unfortunately for them, they ended up before the same judge who of course, stuck to his guns. This case created enough scandal that the judge was sanctioned pretty quickly. Although he was not transferred, he was sent cases of no significance. This meant that his bribe income dropped significantly. He complained to whoever would listen that he had jeopardized his career and had only received less than $3,000 for that court order and now realized it was not worth it.
In another case, a different sibling was able to get access to a bank account that held more than $2 million in it. In this case, he went judge shopping which is always a risk because the judge that doesn’t get the deal will spread the word. He first went to the only judge that had territorial jurisdiction over the matter. We don’t know all the details but the arrangement broke down and the sibling moved to another judge in another court. This judge, who was outside of the proper jurisdiction, requested about $20,000 to sign the court order. My sibling borrowed funds and came up with a $4,000 deposit, promising the rest when the order was signed. Days turned to weeks, and the order was still not signed. Eventually, the sibling realized that the judge had no intention of ever signing. He couldn’t very well ask for a refund.
He then found a judge, again who was completely outside the jurisdiction. Imagine a New York court having jurisdiction but you manage to get a Washington, DC judge to sign your order. This judge unfortunately was much more expensive but he came with a guarantee. He would get the President of the Court of Appeals of his jurisdiction in on the deal which would ensure that the decision would not be overturned. For that, he would require $80,000. After much negotiation, they agreed the judge would be paid when the funds were released from the bank. $80,000 to get $2 million seems like quite a deal.
Another sibling (the one with the birth and marriage certificate) filed criminal charges and tried to get his brother arrested. He paid about $16,000 for that arrest. The sibling who was arrested was later released pending the rest of the investigation. Since he had not been able to spend all of the $2 million before getting caught, there is still over $1 million blocked. Recently, he received a call from a government official offering to have the funds released and his case closed for a mere $40,000.
What I find truly remarkable is that I don’t see or speak to either of these siblings and received none of this information from them. I only know the details because they are just not a secret. These details are out in the public domain. I could go tell officials in the ministry of justice but I might just end up with the one who offered to fix everything for $40,000.
Besides, I will get the same response. Even though they know that corruption was involved, this is impossible to prove. Unlike in the US or Europe were you could talk about wire fraud and follow the money trail through various front companies and financial institutions, we live in a cash society. Unless any of them got a receipt for the money they gave these judges, the cash will be difficult to trace.
Not all judges are corrupt but the honest ones are becoming more and more frustrated. I have a friend who is a judge. He has never been involved in any of my cases but I often go talk to him because he always has good advice. I remember the first time I went to see him I was in tears because my case had been dragging on for so long it was going to bankrupt my company. His advice was to try to find a way to take the case outside of the country! Usually though, he is quite supportive and encourages me to persevere.
This last time, I spent two hours in his office trying to console him. He was discouraged, disgusted and even despondent over the state of the judiciary in the country. Judges he had always respected and admired were now involved in some of the most corrupt cases in the country. There was no incentive to be honest. No incentive to apply the law. In fact, judges who try to remain ethical are more and more ostracized by their colleagues.
This society is broken to its core. The lack of a fair judiciary impacts all segments of society. How do you enforce a patent for innovative technology you have developed? How do you enforce a contract? How do you obtain justice when victim of a physical crime?
For the last few years, I have been mulling about developing a software application for the judiciary. I know they won’t buy it but if I can build it and donate it, they won’t be able to refuse. This won’t stop corruption but it might help to bring more transparency to the system. For example, there would be systematic checks and balances in the system. Gone would be the judgments which are registered and executed before they are rendered (that has happened to me twice!). We could build a system that would be accessible to judicial authorities so that they could monitor cases from their desks instead of waiting for reports that might come too late. We could build in business intelligence that displays in charts and graphs how long cases are taking from beginning to end. The reporting could be by judge, by type of case, by jurisdiction, by lawyer, by party. This will not stop particular lawyers from always going to particular judges but at least this would more obvious.
Perhaps if God led a technology entrepreneur into the jowls of judicial corruption, He intended for me to do something about it. Perhaps God has nothing to do with it and I am still living in denial, hoping that the system can change, despite the evidence that it doesn’t want to. That’s the problem with entrepreneurs. Passion often overrides logic and leads to all sorts of justification for charging forward, blind to the reality around them. That is our greatest fault but it is also our greatest asset.
So I better start forging ahead with my judicial application…
February 18, 2010
We generally don't have many transactions over a period of a year even if the amounts of each transaction can be substantial for the country. Our tax returns are therefore pretty straight forward. We employ chartered accountants who could very well have prepared our returns but the law did not allow this.
As a result, we have always had to use an outside accounting firm. This can become very expensive. They charge you one amount to prepare the return and another to certify it. On an average, we end up with a bill of between $6,000 and $10,000 for a very straight forward return.
Last year, we thought we would be smart and have an accountant prepare the return and then just get the certification from the accounting firm. The accountant works with a network of accounting firms and she gave us a quote of roughly $600 for the certification. We already found that amount excessive but this would be cheaper than having the accounting firm do both.
When the accountant completed the return, she took it to the accounting firm for certification. They wanted $3,000. Why? Because the accountant had underestimated our income when she quoted the $600 and these accounting firms base their fee on the client's tax revenues and not on how much work is involved. We tried other firms but they were all in the same range or even higher.
I just noticed in the new 2010 tax laws that this certification is no longer required. This is really excellent news. There are many small business who simply can't afford to submit a tax return even if they owe little or nothing simply because they cannot afford to get the return prepared by an accounting firm or get it certified.
Some people (the accounting firms) point out that this will result in increased fraud. I disagree with this entirely. First of all, the accounting firms just sign and stamp. They don't really look at the document. These are not audited by the accounting firms, just certified. Moreover, more companies will now be able to afford to file their taxes which reduces, not increases fraud.
I also think that the accounting firms will have to provide added value (like tax advice or revising the tax return) rather than simply certifying it for a fee.
I have not looked at all the provisions in the new tax laws and I am sure to find some that I will cry over. But at least this one is really quite positive.
February 16, 2010
The accountant explained that we were paying for air. Yes. Really. After noticing that our bills were unusually high given the usage, the accountant and a plumber did a test. They checked the water meter when there was no service and noticed that the meter was running. After some tests, they realized that whenever we opened any water faucet or tried to flush the toilet, the meter would count that as water used! I thought this was impossible.
A couple days ago, I ran into the water meter reader. He seemed friendly and I asked him about this strange billing. He actually admitted that this was indeed the case and that many people were complaining about it but that there was nothing he could do.
The water utility was privatized a couple years ago as one of these World Bank / IMF imperatives. The quality of the water has not improved; the service has gotten worse and the prices have increased. I was in the office of the CEO of the water utility once and I thought it was very telling that he had bottled water on his desk!
I have not seen the new financial results for the water utility. I would not be surprised to see that their profitability increased substantially. After all, they are the exclusive distributor of paid air in the country.
February 8, 2010
I don't have the other side of the story but this is a very common tale which is certainly not unique to Senegal. Few, if any, of these large licenses or concessions occur without corruption. I am not saying this happened in Millicom's case and I certainly have no inside information but a lot of times these stories become a scandal only when "corruptor" and "corrupted" stop seeing eye to eye.
I read comments that Millicom's license had been revoked for number of years ago but they were still able to do business. Under what agreement? Why didn't Millicom protest then? I am not in any way defending the government of Senegal but in the game of corruption, it takes two to play....
This should serve as an example to other companies who tend to close their eyes when they first want to get in and then are surprised when their former partners come begging for more. I remember meeting a delegation of one of the largest US telecom companies coming to the country I am in. They were really interested in the market. They eventually decided that the risk was not worth it. As they explained to me in private, they were not "experienced" enough with the business environment.
African nations should understand that by requiring foreign investors to bribe officials to get these licenses and concessions, they will get a type of investor that is not necessarily a good corporate citizen. Real investors shy away and sharks come in to do business.