tag:blogger.com,1999:blog-193289752024-03-14T02:14:57.135-04:00Diary of an African EntrepreneurWhat is it really like to be an African Entrepreneur? The day-to-day reality of running a business in Africa.Unknownnoreply@blogger.comBlogger42125tag:blogger.com,1999:blog-19328975.post-40319181465924430702016-04-23T09:56:00.003-04:002016-04-23T10:22:37.178-04:00Expanding my Tech Business into Africa... The Early Days<div class="MsoNormal">
In my last post, I wrote about the rise of AppsTech. A
meteoric rise it was. <a href="http://africanentrepreneur.blogspot.com/2016/04/7-lessons-from-african-woman.html">With
no funding, a young African woman had succeeded in building a global tech business</a>.
<o:p></o:p></div>
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<br /></div>
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We were profitable, had happy customers across the globe, and
we had year-on-year growth of 200%. As we demonstrated innovation in the <a href="http://africanentrepreneur.blogspot.com/2016/04/7-lessons-from-african-woman.html">delivery
of services</a>, we also placed a great emphasis on innovation in products. <o:p></o:p></div>
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In 2001, AppsTech acquired a startup that had designed a mobile applications development platform. Their CEO was a Kunle M., a brilliant Nigerian entrepreneur who would become a key player at AppsTech. His startup became Mobile AppsTech. Kunle led the initiative and also joined our Executive Committee as Chief Strategy Officer. Mobile AppsTech
won several awards, including from the State of Pennsylvania that gave us a
spot in their incubator in Philadelphia. We wanted to scale this business fast
as we were feeling pressure from giants like Oracle, who were starting to
incorporate mobile development tools into their middleware. <o:p></o:p></div>
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<br /></div>
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As our CSO, Kunle was also working on AppsTech Africa, our vision
to become the largest provider of enterprise software solutions on the African
continent. We had sensed already in 2001 that Mobile and Africa were going to
be big. We needed to figure out how to marry the two. <!--[if gte vml 1]><v:shapetype id="_x0000_t75" coordsize="21600,21600"
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Kunle starts to court MTN, a South African telco that was
expanding fast across the continent. They were our role model for expansion
into Africa. More importantly, they had a mobile apps subsidiary that they
wanted to get out of. We jumped at the opportunity. <o:p></o:p></div>
<table align="center" cellpadding="0" cellspacing="0" class="tr-caption-container" style="margin-left: auto; margin-right: auto; text-align: center;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPudivCid9PiBpkxh5CH5N295m_EQxseXSm8NXqGewsGlxmSgHFo3BNBRgBEWAET_7hfX0L8GlwtY67RhadS9ATMLtel_lCOeFm-_4wvsYZFMxdVOOTsqAv-Y19J3ZvAXpCs4c7w/s1600/Kunle%2527s+board.jpg" imageanchor="1" style="margin-left: auto; margin-right: auto;"><img border="0" height="352" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjPudivCid9PiBpkxh5CH5N295m_EQxseXSm8NXqGewsGlxmSgHFo3BNBRgBEWAET_7hfX0L8GlwtY67RhadS9ATMLtel_lCOeFm-_4wvsYZFMxdVOOTsqAv-Y19J3ZvAXpCs4c7w/s640/Kunle%2527s+board.jpg" width="640" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">The Thought Board in Kunle's Office</td></tr>
</tbody></table>
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So while Kunle was busy negotiating with MTN, we were opening an
office in my native Cameroon. Kunle thought it was a bad idea. Actually, he
thought it was a horrible idea. For him, the country presented too many risks
and not sufficient rewards. “The numbers don’t add up Rebecca.” Kunle agreed we
should have a small office there but he didn’t think Cameroon should be the
gateway into our expansion into Africa. But I was the group CEO and I won. I
said this before but Kunle was smart. And I really should have listened to him.
You’ll soon understand why.</div>
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<o:p></o:p></div>
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<br /></div>
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We had already started subletting a small office in Cameroon
to support our sales activity and had a staff of three. It made sense that
Cameroon should be our regional hub. The country was bilingual French and
English so it could support our expansion into both Anglophone and Francophone
Africa. I also had strong ties there and I was sure that I could leverage my
relationships with my childhood friends who were now decision makers as well as
access my father’s extensive network.<br />
<br /></div>
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Because of our “global from day one” vision, and because we wanted
to scale geographically very fast, we had developed our own step-by step methodology
for entering a new market. We had tested it in Canada, France and England and
later in Ghana. So how hard could my own native country possibly be? <o:p></o:p></div>
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<br /></div>
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With the support of the rest of our executive team and a
reluctant Kunle, I started to execute the plan. I registered the company, hired
a country manager, rented office space and started the build-out. Some Columbia
University MBA students followed me around for a few months, including to
Cameroon and wrote their thesis on this experience which is available <a href="https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/91/Cameroon_AppsTech.pdf">here</a>.
Pretty soon, we had pumped half a million dollars into this operation. Video of some of the construction is <a href="https://youtu.be/KiLub0qRNCU" target="_blank">here</a><o:p></o:p></div>
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<br /></div>
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Fortunately, MTN’s local subsidiary in Cameroon launched an
international RFP for an ERP system just a short time later. This was perfect. Most
of our large customers worldwide were telcos. We were in the very first batch
of Oracle certified e-Business Suite partners anywhere in the world and we had
a local office in Cameroon. We were hugely qualified for the RFP. On the other
side, MTN was the dream customer. They were growing fast on the continent, they
were privately owned so we wouldn’t need to worry about corrupt government officials
and we had already had an existing relationship with their parent company in
South Africa. Even Kunle was excited.<o:p></o:p></div>
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<br /></div>
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What had propelled AppsTech to success was our unique
delivery model. The project itself didn’t quite fit into this. One of our products
was called FastApps for Oracle Financials which was a fixed price, fixed scope,
fixed time turnkey solution. It worked for small business but MTN Cameroon was
too large and too complex for this. So we ended up proposing a hybrid. A “FastApps”
that was longer in time and more extensive in scope, but also had a fixed price
with a formula on additional fees if the deadlines weren’t met. <o:p></o:p></div>
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<br /></div>
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We worked furiously on the proposal, responding to hundreds
of technical questions and asking quite a few ourselves in order to better
scope the project. We had huge competitors, all the big software companies had
bid, including Oracle Africa itself. Our hard work paid off and we made it through
to the next round (kicking Oracle’s a**).<o:p></o:p></div>
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Jean-Michel, our EVP for Tech Solutions and 6 other people
including myself, flew to Cameroon to present the proposal and do a product
demo. Internet was very unreliable so we had even traveled with our own server.
Our offices were still under construction so we had set up in a suite in a
local hotel and literally worked 24/7. Sleeping was not allowed.<o:p></o:p></div>
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<br /></div>
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The presentation went very well. We made it to the final
round. <o:p></o:p></div>
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<br /></div>
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For the following two months, an MTN team embarked on a four
country due diligence tour, flying to France, the US and Canada to meet with
our staff, our customers and even our bankers. <o:p></o:p></div>
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<br /></div>
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This meant that each time, I, or another executive had to
fly to meet them too. This proposal project was becoming a major distraction.
In order to respond to the extensive technical questions, we had pulled several
of our best resources to work full time on the proposal. We also had to build a
prototype for the demo including a custom interface into a point-of-sale system
called Lexys, the only online/offline French/English system we could find. <o:p></o:p></div>
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<br /></div>
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But the proposal project wasn’t just distracting my time, it
had distracted my focus. Kunle started complaining but he wasn’t alone. The
finance team started raising concerns about the cost of the proposal to our
business, especially when added to the new Cameroon office and its construction budget overruns. Some of the non-Africans on the team started to question the whole
Africa vision.<br />
<br />
We had never had to devote so much time, so much effort, and so
much money to any customer during the proposal process. I argued that this was
a loss-leader, and if we won this project and succeeded in the delivery, MTN assured
us that we would implement the solution in their other subsidiaries. This client was essential in our African growth strategy.<br />
<br />
I wasn’t
worried about executing the project. We mastered the technology. But what if we
didn’t win? My real question should have been “What if we won?”<br />
<br />
Next time, I will answer that.<br />
<o:p></o:p></div>
African Entrepreneurhttp://www.blogger.com/profile/09936235866417616013noreply@blogger.com68tag:blogger.com,1999:blog-19328975.post-30138253200090632042016-04-12T13:13:00.001-04:002016-04-21T03:03:40.739-04:007 Lessons from an African Woman Entrepreneur on Building a Global Tech Business<div class="MsoNormal">
<i><span style="font-size: x-small;">Note: This is the first of a series on some experiences on entrepreneurship I have had over the years.</span></i><br />
<br />
On Twitter, I am best known as a curator of African tech
news and in general as someone promoting tech entrepreneurship in Africa. In
fact, many think I am a blogger or a journalist. What many don’t realize is
that I am also a successful tech entrepreneur.<o:p></o:p></div>
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<br /></div>
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In 1999, I set up AppsTech to provide enterprise software
solutions, primarily around Oracle technologies. I started with literally no
money and despite my best efforts, never raised any funding. I was a woman tech
founder. I was a Black woman tech founder. I was a Black African woman tech
founder. <o:p></o:p></div>
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<br /></div>
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Although those might have been external factors, my race,
gender, or national origin were never a part of my equation. I lived in a self-created
bubble in which those elements didn’t matter and I went about my business as
any white male would have, oblivious to the reality that surrounded me and the
challenges before me. It honestly never occurred to me that it might be any
harder for me than any of my fellow startup entrepreneurs.<o:p></o:p></div>
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<b><i><span style="color: #bf9000;">Lesson One: Your reality is the one that you create in your mind, not
the one that others create for you.</span></i></b><i><o:p></o:p></i></div>
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<b><i><br /></i></b></div>
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Because I was not conscious of how difficult this was, I could
be bold. And bold I was. With very little savings and no financial backing, I
set out to build a global multi-million dollar business.<o:p></o:p></div>
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I spent the first two weeks doing nothing but writing my
business plan. Because I was writing it for me, and not for bankers or
investors, I could be completely honest. I was able to lay out my weaknesses,
market risks in a very bare, truthful way. Then I could think of strategies to
counter these. As I did this, my business model changed significantly from what
I first intended. Over the years of course, it changed some more. <o:p></o:p></div>
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<b><i><span style="color: #bf9000;">Lesson Two: Having a personal business plan is very effective. </span></i></b><i><span style="color: #bf9000;">When we pitch to investors or customers, we
want them to drink our Kool-Aid. It’s important though, to realize that it is
Kool-Aid and not to drink it ourselves. </span><o:p></o:p></i></div>
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<i><br /></i></div>
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So I realized by developing my plan that the type of
customers that most purchased my offerings were multinational. That meant that
I also needed to be a multinational. How a one woman company becomes a global
business can be resumed by one word. The internet.<o:p></o:p></div>
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<br /></div>
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I built the company’s web site and it was available in both
English and French. I spent days studying the web sites of companies like Arthur
Andersen, PwC and CapGemini and mimicked the look and feel. The site wasn’t
very nice but in those days, neither were my competitors’. I couldn’t yet
afford an office but I did get a virtual business address I could use on the
web site and on a business card. I didn’t include a title on the card. I wanted
the flexibility of being the CEO when I wanted or just one of the engineers if
the situation warranted. I might have been a one person business but I
presented myself as a global corporation.<o:p></o:p></div>
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<br /></div>
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Armed with by new business cards, my new web site, I spent a
couple thousand dollars going to an industry conference. During that
conference, I landed my first customer. A multinational. Of course, they had no
idea that I was a one-woman machine. And they didn’t need to. They needed some
technical advice that I knew I could provide.</div>
<div class="MsoNormal">
<b><i><span style="color: #bf9000;">Lesson Three: Fake it ‘till you make it but never sell more than you
can’t deliver. </span></i></b><i><o:p></o:p></i></div>
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<b><i><br /></i></b></div>
<div class="MsoNormal">
I used all of the revenue generated from that client and
invested it in my business. I rented an actual office, hired a part time
assistant. I never used any of those funds to pay myself. In fact, I was
homeless and couch-surfed for two years before I finally got my own place. In
the 17 years I have been in business, I have always paid myself last and have
never had the highest salary in the company. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
But couch-surfing wasn’t just about saving money; because I
didn’t have a home, I could focus entirely on my business. I wouldn’t leave the
office until at least 2:00 AM. There were absolutely no distractions; there was
absolutely no comfort.<o:p></o:p></div>
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<b><i><span style="color: #bf9000;">Lesson Four: Comfort is your enemy. Be prepared to make huge sacrifices.
</span><o:p></o:p></i></b></div>
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<b><i><br /></i></b></div>
<div class="MsoNormal">
As I mentioned before, even though I was a tiny business, I
was global from day one. Every single tool I purchased to run my business had
to work from anywhere. In a world where the word “cloud” still defined
something you could look up to in the sky, I only bought software accessible
over the internet. We were one of Salesforce.com’s early customers. Also, each
individual I hired, from my assistant to my technical and executive team, had to
have worked or lived overseas and speak at least two languages. So where my like
sized competitors were focusing on the small local customer, I had my eyes on
the more lucrative global market. And because everything was designed to be
global from the very first day, I didn’t have to pivot years later and develop
a global strategy, change systems and staff. Global in one location with four
employees is actually the same structure as global in ten locations with
hundreds of employees. Global is a way of thinking. <o:p></o:p></div>
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<b><i><span style="color: #bf9000;">Lesson Five: Design your business structure to address the largest
market you can, not your current state. </span><o:p></o:p></i></b></div>
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<b><i><br /></i></b></div>
<div class="MsoNormal">
There were several aspects to our business model which were
unusual at the time and helped us sign some very large deals within our first
few years in business. One of them was that I personally hated bureaucracy. I
still do. I have an intense dislike for paperwork and administrative
procedures. What I came to realize was that so did many of my customers. When a
bureaucratic multinational company is faced with a bureaucratic multinational
supplier, the purchasing process and the delivery of services becomes complex
and bogged down. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
So I tried to simplify the process. I basically productized
services. So rather than sell so many man/hours or man/days with different
rates for different people, I created packages that customers could choose
from. For instance, support contracts had traditionally been per “seat” or per
person on the contract. We proposed three different levels of a support product
that never specified who, or how many would provide them. Not only did this
greatly simplify the purchasing and delivery process but it also allowed us to
scale. Since we weren’t paid by number of consultants, we could build
efficiencies to reduce labor costs on customers and spread our resources across
multiple contracts. In the US in 2000, this was innovative. <o:p></o:p></div>
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<b><i><span style="color: #bf9000;">Lesson Six: If the product or service you are providing isn’t
innovative, your delivery of it can be. </span><o:p></o:p></i></b></div>
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<b><i><br /></i></b></div>
<div class="MsoNormal">
Of course, I couldn’t have done any of this without a
fantastic team. I sought out the very best minds in the industry and sometimes
courted them for months before they would come on board. As often as possible,
I tried to find the brightest in the African community. Congo, Nigeria, Cote d’Ivoire,
Central African Republic, Sudan, Cameroon, and more were all represented at
AppsTech. This in addition to China, Korea, India, France and the UK. Most of
them were much smarter than I was. Although some were obviously intelligent,
they didn’t necessarily have specific industry experience. One of my very best
hires for example, was a political science major with absolutely no Oracle and
little IT experience. But I loved the way he carried himself. I hired him on
the spot. As a Client Relationship Manager, his ability to navigate difficult
personalities was key. Another guy had a degree in veterinary science. He too
had no Oracle experience. But he spoke five languages fluently including
Russian and Spanish. If he could learn foreign languages so easily, surely “speaking”
SQL wouldn’t be a stretch. He went on to get multiple Oracle certifications and
was one of the very best members of our technical team. <o:p></o:p></div>
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<b><i><span style="color: #bf9000;">Lesson Seven: Hire the very best or train the very brightest</span><o:p></o:p></i></b></div>
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<b><i><br /></i></b></div>
<div class="MsoNormal">
Within four years, AppsTech had seven offices across three
continents and customers in over 50 countries. We had generated tens of
millions of dollars in revenue. By the time our model caught on, we already had
established ourselves as the market leader. We had weathered the tech bubble
and had seen many of our competitors, even some a hundred times our size, disappear.
Profiles in the Wall Street Journal, The Washington Post, Computer World,
Fortune Magazine and many others. <o:p></o:p></div>
<br />
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The epitome of success. We were unstoppable. Or maybe we
weren’t…. But that’s for another post. <o:p></o:p></div>
African Entrepreneurhttp://www.blogger.com/profile/09936235866417616013noreply@blogger.com31tag:blogger.com,1999:blog-19328975.post-28975268745557012272013-04-19T08:46:00.002-04:002013-04-19T08:46:44.744-04:00Yellow Journalism, African Style.. Part 2<br />
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Over the last couple of weeks, I have been subject to a full
out smear campaign orchestrated by one of my <a href="http://africanentrepreneur.blogspot.com/2010/02/judicial-corruption-and-what-can-be.html" target="_blank">crazy brothers</a> using the press. Since he failed to destroy me in court, he brought his case to the newspapers. </div>
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<br /></div>
<div class="MsoNormal">
I
have previously posted on the topic of what I call <a href="http://africanentrepreneur.blogspot.com/2007/01/yellow-journalism-african-style.html" target="_blank">African yellow journalism on </a></div>
<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGYnZRpgsju3SaytmPhmcayOKEnQQSDmmNJzf3cY9WlVunhnYqw2s1c5vFcIEHnT2DOijSj3ed6m68B0TSeiz1sjgT3zQOENRBKZXebILBvb2yH2YBZFggsSlNxKg2TR4527qKBQ/s1600/yellow+journalism.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgGYnZRpgsju3SaytmPhmcayOKEnQQSDmmNJzf3cY9WlVunhnYqw2s1c5vFcIEHnT2DOijSj3ed6m68B0TSeiz1sjgT3zQOENRBKZXebILBvb2yH2YBZFggsSlNxKg2TR4527qKBQ/s1600/yellow+journalism.jpg" /></a></div>
this blog. In the past, I ignored the articles "ordered" against me. This time however, the accusations
that I was a CIA agent and that my company a front for the CIA merited a
response. So I ended up having to meet with so-called “journalists.” My oh My! This
was a real eye opening experience for me.<o:p></o:p><br />
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<br /></div>
<div class="MsoNormal">
Of about 10 papers, only one Editor-in-Chief admitted
approving the article for publication. All the others contended that a staff
journalist or intern had inserted the article without their knowledge. It was
almost comical how each of these had the very same excuse. They were out of
town… They are only reading the article as I am speaking to them and had not
seen it before… The article was a disgrace and they are shocked that anyone
would print anything like that but it is not at all what they do… They will
suspend/fire the culprits… They will personally be writing the retraction to
give it more credibility… <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
They were obviously reading from the same book of how not to
get sued. In this country, libel is a criminal offense and both the newspaper’s
Editor and the author of the article can be sent to prison. All of these
Editors were disingenuous and it was obvious that they were well aware of the
contents of the article before it was published and were simply trying to cover
their tracks. <o:p></o:p></div>
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<div class="separator" style="clear: both; text-align: center;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifZDppisiFZeEVoXC5Q8tV1T_efk3RTAHLi5QT7qdRybNhIZntuVdtf3kZDjubrbNibfpIHft_ygnJsfIB6rc_9IxGXz6TJWMSWS-cSsFw3mBPHR4Ir8kP0RaJiMxTGCEUC7QAfA/s1600/newspaper.jpg" imageanchor="1" style="clear: right; float: right; margin-bottom: 1em; margin-left: 1em;"><img border="0" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEifZDppisiFZeEVoXC5Q8tV1T_efk3RTAHLi5QT7qdRybNhIZntuVdtf3kZDjubrbNibfpIHft_ygnJsfIB6rc_9IxGXz6TJWMSWS-cSsFw3mBPHR4Ir8kP0RaJiMxTGCEUC7QAfA/s1600/newspaper.jpg" /></a></div>
<div class="MsoNormal">
In the process of having to meet all of these “Editors” and “journalists”
I learned a lot about how they conduct their profession. First of all, most of
them had not bothered to actually write the article. They just printed what had
been sent to them by email or on a USB key. This explained why the articles were
all almost identical, including the title. They even received various jpg photos
as part of the process. This meant that they had absolutely nothing to do except
sign their name and find space in their newspaper in exchange for some money. The reality is that you order an article like you order an ad. Only in most major newspapers in the rest of the world, even the ad must meet certain standards. Here, just like with paid advertising, the placement of the article in the newspaper (front page or buried on page 6)
is a reflection of the amount of money the paper received. </div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
One editor was furious at his journalist. “He probably got a
lot of money for this! And can you imagine, I didn’t get any of it. And I am
the one that takes the blame.” His problem was not the content but not getting
his “fair share.”</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
One of the “journalists” actually opened his email in front
of me to show me who sent him the article (in 2 different versions) and showed
me the attached photos that he could choose from. He explained that he had
picked one of the two versions, had not changed so much as a comma, selected
one of the pictures and simply signed his name as the author. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I actually read through an article with one “journalist” and
pointed out that not a single sentence in his full page article was correct. <b><i>Not
one</i></b>. “I did not read it in that much detail,” he answered. While we
were speaking, he mistakenly spilled his glass of water. I wiped the water off
with his newspaper and told him that was the only thing his paper could be
useful for. A pity he didn’t ask to go to the toilet… <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I asked some of the “journalists” what evidence they had in
order to publish the nonsense they printed. They had none and in truth, they
had not even thought about that question. You see, in most cases, as they
explained, the person attacked simply writes their version and they just print
that. They all offered to give me space to refute their article and were
shocked when I refused. I told them that they would have to write a retraction themselves
on anything they printed which they could not prove. I was therefore putting
the onus on them to write an article, an exercise they apparently were not
accustomed to. They kept complaining that it was too much work and even
suggested that I should write the retraction as if <i>they</i> had written it and they would sign. I refused. They would have
to repair the damage or I would sue. All of them finally agreed, albeit reluctantly,
to write a retraction; and truthfully a couple have already published it. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Another common occurrence was that these “journalists” saw
my meetings with them as a revenue generating opportunity. Most wanted me to “finance”
the retraction!! “Madame, it is expensive to print a paper.” I honestly almost
slammed one of their faces into my meeting room table. My answer: don’t
print a retraction and deal with the consequences. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Others adopted a more subtle strategy. They would print a
retraction saying that they had made a mistake but then they also wanted to
help me to get back at the person that had financed the campaign. “You need to
attack him!” “We will print anything you want against him. All we want is
support.” Support = money. I told them I had never paid for any article in any
newspaper anywhere in the world and I would not start now. They were actually
surprised. It seemed strange to them that I would not want to do that against
my enemies. Some thought I was stupid or naïve. A missed opportunity. LOL!<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
To be clear, not all journalists who received the articles
or were offered money printed anything. All but one of the dailies refused and
the one that did was very mild (no CIA reference). And even they agreed to
print a retraction. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p>These so-called ‘journalists’ tarnish the reputation of the
few who struggle through a difficult profession, constantly putting their lives
at risk and having to overcome enormous financial constraints. After meeting so
many of their “colleagues,” I have even greater respect for the real
journalists who have not fallen prey to easy money. <o:p></o:p></div>
African Entrepreneurhttp://www.blogger.com/profile/09936235866417616013noreply@blogger.com28tag:blogger.com,1999:blog-19328975.post-49615430858343828372013-03-20T13:52:00.000-04:002013-04-06T17:10:12.634-04:00Failure can be inspiring - if you can overcome the psychology<div dir="ltr" style="text-align: left;" trbidi="on">
<blockquote class="tr_bq">
<span style="font-family: inherit; font-size: xx-small;"><i>Updated on April 6 2013 to include a reference to a recent article</i></span></blockquote>
<blockquote class="tr_bq">
<span style="font-family: inherit;">One of my very favorite documentaries ever is <a href="http://www.allmovie.com/movie/v237159" target="_blank">Startup.com</a>.
This is the story of <u><span style="color: blue;"><a href="http://en.wikipedia.org/wiki/Kaleil_Isaza_Tuzman" title="Kaleil Isaza Tuzman">Kaleil Isaza Tuzman</a></span></u> 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.</span><br />
<div class="separator" style="clear: both; text-align: center;">
<span style="clear: right; float: right; font-family: inherit; margin-bottom: 1em; margin-left: 1em;"><img alt="Startup.com " border="0" height="400" src="http://upload.wikimedia.org/wikipedia/en/thumb/a/ae/Startup_dot_com.jpg/220px-Startup_dot_com.jpg" title="" width="268" /></span></div>
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<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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. </span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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 <i>feel </i>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. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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. <o:p></o:p></span></div>
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<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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'.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">I have met many entrepreneurs that never got
over the psychological effect of their failure. They knew all the lessons, and
if they <i>could </i>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.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">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. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; margin-right: 1em; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="http://www.kaleil.com/uploaded/aboutkaleil.jpg" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="320" src="http://www.kaleil.com/uploaded/aboutkaleil.jpg" width="213" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Kaleil I.Tuzman</td></tr>
</tbody></table>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: inherit;">Back 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 <a href="http://www.forbes.com/forbes/2010/1025/entrepreneurs-jumptv-kit-digital-startup-the-sequel.html">launch
successful startups</a>. 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 <a href="http://publicdatasystems.com/govworks-case-studies/Lessons-Learned-govWorks/govworks-startup.com-1.html">lessons
down</a>. </span></div>
</blockquote>
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 <a href="http://africanentrepreneur.blogspot.com/2011/03/managing-my-psychology.html" target="_blank">overcome my own psychology</a> and to see failure for what it is: another step towards success. <br />
<blockquote class="tr_bq">
<div class="MsoNormal">
<i>Update: just two weeks after I published this post, I came across this article about an entrepreneur <a href="http://bit.ly/16BVecA" target="_blank">who didn't recover from failure</a>. It is heartbreaking and food for thought. </i></div>
</blockquote>
<blockquote class="tr_bq">
<div class="MsoNormal" style="line-height: 12.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt;">
<i><span style="font-family: inherit;">….Despite his many friends and backers, Sherman
ultimately bore the burden of Ecomom's success or failure alone.....</span></i></div>
</blockquote>
<blockquote class="tr_bq">
<div style="line-height: 16px; margin-top: 1em; padding: 0px; text-align: left;">
</div>
<div class="MsoNormal" style="line-height: 12.0pt; margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt;">
<i><span style="font-family: inherit;">….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….</span></i><span style="font-family: 'Times New Roman', serif; font-size: 13.5pt;"><o:p></o:p></span></div>
</blockquote>
<span style="font-family: inherit; line-height: 16px;">Read the full story: </span><a href="http://bit.ly/16BVecA" target="_blank">The Story Of A Failed Startup And A Founder Driven To Suicide</a><br />
<span style="font-family: inherit; line-height: 16px;"><br /></span>
<span style="font-family: inherit; line-height: 16px;">Sad example of one entrepreneur who couldn't overcome his psychology... </span></div>
Unknownnoreply@blogger.com12tag:blogger.com,1999:blog-19328975.post-82271608272035822682011-04-13T14:56:00.005-04:002011-04-13T17:20:20.411-04:00Top in ICT in Sub-Saharan Africa -Mauritius, South Africa and ...The Gambia?<div dir="ltr" style="text-align: left;" trbidi="on">Sub-Saharan Africa did very poorly on the latest World Economic Forum’s Networked Readiness Index (NRI) with the majority of the region lagging in the bottom half of the 138 countries being ranked in the report. Exceptions were Mauritius (which ranks 47th) and South Africa (which ranks 61st). <br />
Burundi (137th) and Chad (138th) were the worst ranked of all countries on the list. <br />
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 <a href="http://www.un.org/ecosocdev/geninfo/afrec/vol25no1/rwanda-information-technology.html">country on a fast-lane to technology growth</a>. <br />
The ranking holds some surprises. The Gambia and Senegal rank higher than Kenya even though Kenya did rise 9 places since the 2010 report. <i>Hmmm. How much did The Gambian and Senegalese governments pay?</i> :)<br />
Here are the rankings of Sub-Saharan African countries <br />
<b></b> <br />
<table border="1" cellpadding="0" cellspacing="0" style="width: 363px;"><tbody>
<tr> <td valign="top" width="157"><b>Country</b></td> <td valign="top" width="48"><b>Rank</b></td> <td valign="top" width="156"><b>Notable Improvement</b></td></tr>
<tr> <td valign="top" width="157"><b>Mauritius </b></td> <td valign="top" width="48">47</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>South Africa </b></td> <td valign="top" width="48">61</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Gambia </b></td> <td valign="top" width="48">76</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Senegal </b></td> <td valign="top" width="48">80</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Kenya</b></td> <td valign="top" width="48">81</td> <td valign="top" width="156">up 9 spots since 2010<b></b></td></tr>
<tr> <td valign="top" width="157"><b>Namibia </b></td> <td valign="top" width="48">82</td> <td valign="top" width="156">up 7 spots since 2010</td></tr>
<tr> <td valign="top" width="157"><b>Cape Verde </b></td> <td valign="top" width="48">84</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Botswana </b></td> <td valign="top" width="48">91</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Ghana </b></td> <td valign="top" width="48">99</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Zambia </b></td> <td valign="top" width="48">102</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Nigeria </b><b></b></td> <td valign="top" width="48">104</td> <td valign="top" width="156"><b></b></td></tr>
<tr> <td valign="top" width="157"><b>Malawi</b><b></b></td> <td valign="top" width="48">105</td> <td valign="top" width="156">up 14 since 2010</td></tr>
<tr> <td valign="top" width="157"><b>Mozambique</b><b></b></td> <td valign="top" width="48">106</td> <td valign="top" width="156">up 10 since 2010</td></tr>
<tr> <td valign="top" width="157"><b>Uganda </b><b></b></td> <td valign="top" width="48">107</td> <td valign="top" width="156">up 8 since 2010</td></tr>
<tr> <td valign="top" width="157"><b>Côte d’Ivoire </b></td> <td valign="top" width="48">113</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Benin </b></td> <td valign="top" width="48">114</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Tanzania </b><b></b></td> <td valign="top" width="48">118</td> <td valign="top" width="156"><b></b></td></tr>
<tr> <td valign="top" width="157"><b>Mali </b><b></b></td> <td valign="top" width="48">120</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Lesotho</b><b></b></td> <td valign="top" width="48">121</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Burkina Faso</b><b></b></td> <td valign="top" width="48">122</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Ethiopia </b></td> <td valign="top" width="48">123</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Cameroon </b><b></b></td> <td valign="top" width="48">125</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Mauritania</b><b> </b></td> <td valign="top" width="48">130</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Zimbabwe </b><b></b></td> <td valign="top" width="48">132</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Angola </b></td> <td valign="top" width="48">133</td> <td valign="top" width="156"><b></b></td></tr>
<tr> <td valign="top" width="157"><b>Swaziland </b><b></b></td> <td valign="top" width="48">134</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Burundi </b></td> <td valign="top" width="48">137</td> <td valign="top" width="156"></td></tr>
<tr> <td valign="top" width="157"><b>Chad </b><b></b></td> <td valign="top" width="48">138</td> <td valign="top" width="156"></td></tr>
</tbody></table>The full report is available of the World Economic Forum website for <a href="http://www3.weforum.org/docs/WEF_GITR_Report_2011.pdf">download</a> (pdf) <br />
<br />
<div class="wlWriterEditableSmartContent" id="scid:0767317B-992E-4b12-91E0-4F059A8CECA8:d26dacc9-b2a5-46a7-9d40-60d740474537" style="display: inline; float: none; margin: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Technorati Tags: <a href="http://technorati.com/tags/Africa" rel="tag">Africa</a>,<a href="http://technorati.com/tags/Africatech" rel="tag">Africatech</a>,<a href="http://technorati.com/tags/ICT" rel="tag">ICT</a>,<a href="http://technorati.com/tags/NRI" rel="tag">NRI</a>,<a href="http://technorati.com/tags/WEF" rel="tag">WEF</a>,<a href="http://technorati.com/tags/INSEAD" rel="tag">INSEAD</a>,<a href="http://technorati.com/tags/Sub-Saharan+Africa" rel="tag">Sub-Saharan Africa</a>,<a href="http://technorati.com/tags/report" rel="tag">report</a></div></div>Unknownnoreply@blogger.com31tag:blogger.com,1999:blog-19328975.post-53683884209061069832011-04-07T18:14:00.001-04:002011-04-07T18:14:18.051-04:00African Innovation Needs Real Venture Capital<p>I came across this <a title="Forbes" href="http://blogs.forbes.com/mfonobongnsehe/2011/04/07/why-africa-may-never-produce-a-facebook-groupon-zynga-or-google/">Forbes</a> article today by <a href="http://blogs.forbes.com/mfonobongnsehe/">Mfonobong Nsehe</a> in which he decries the absence of venture capitalists to support the technology innovators on the continent:</p> <blockquote> <p>Africa has its own <a href="http://www.forbes.com/profile/mark-zuckerberg">Mark Zuckerbergs</a>, Andrew Masons, <a href="http://www.forbes.com/profile/mark-pincus">Mark Pincuses</a>, <a href="http://www.forbes.com/profile/larry-page">Larry Pages</a> and <a href="http://www.forbes.com/profile/sergey-brin">Sergey Brins</a>. But it lacks its own Yuri Milners, <a href="http://www.forbes.com/profile/john-doerr">John Doerrs</a>, <a href="http://www.forbes.com/profile/vinod-khosla">Vinod Khoslas</a> and <a href="http://www.forbes.com/forbes/2010/1108/best-small-companies-10-y-combinator-paul-graham-disruptor.html">Y Combinators</a>.</p></blockquote> <p>He adds:</p> <blockquote> <p>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.</p></blockquote> <p></p> <p></p> <p>Nsehe is right. When it comes to African technology, there is no, or little venture capital available to African entrepreneurs. <img style="display: inline; margin-left: 0px; margin-right: 0px" title="Ory Okolloh" alt="Ory Okolloh" align="right" src="http://memeburn.com/wp-content/uploads/Ory-Okolloh.jpg" width="240" height="164">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. </p> <p><a href="http://www.ushahidi.com">Ushahidi</a> is a perfect example of this. This revolutionary technology, whose founder is Kenyan woman entrepreneur <a href="http://en.wikipedia.org/wiki/Ory_Okolloh">Ory Okolloh</a> (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 <a href="http://www.ushahidi.com/about-us/partners">funders</a> listed on the Ushahidi web site almost all end in “Foundation.” <a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEipfePC0hxYd7MkKvZ6APwOZGRrS6yBclP0Z7wzyBts-K11Q1-10zvE9qm7FEWPhi0FjAz6KxATtcHNLuhBdJOuzDfV9q7P6gxaz73jicy_tURiuiVmQRgyl3eUnSHrojpItdZ8/s1600-h/image%5B10%5D.png"><img style="border-right-width: 0px; display: block; float: none; border-top-width: 0px; border-bottom-width: 0px; margin-left: auto; border-left-width: 0px; margin-right: auto" title="image" border="0" alt="image" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhWU8eWI9z1KbzZckLm9x41wvSrPCsCLuMOr__WFHoYLHvPIZ1Ohey6Ux0JZ9tECp-R580yypK8AmwNKjlGI1TDM9qoInpEKAYv9eML575uePrv-aG-6M18Q4OHIl5dCKHxmk_i/?imgmax=800" width="366" height="216"></a></p> <p>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. </p> <p>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. </p> <p>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. (<em>Don’t let me get going on the women and finance thing here…).</em> 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 <a href="http://en.wikipedia.org/wiki/Pets.com">online pet shopping site</a> in Silicon Valley. </p> <p></p> <p></p> <p></p> <div style="padding-bottom: 0px; margin: 0px; padding-left: 0px; padding-right: 0px; display: inline; float: none; padding-top: 0px" id="scid:0767317B-992E-4b12-91E0-4F059A8CECA8:ca8fe474-636b-4633-8f44-73d3884cfe08" class="wlWriterEditableSmartContent">Technorati Tags: <a href="http://technorati.com/tags/African+technology" rel="tag">African technology</a>,<a href="http://technorati.com/tags/venture+capital" rel="tag">venture capital</a>,<a href="http://technorati.com/tags/africa+entrepreneur" rel="tag">africa entrepreneur</a>,<a href="http://technorati.com/tags/Forbes" rel="tag">Forbes</a>,<a href="http://technorati.com/tags/Ushahidi" rel="tag">Ushahidi</a></div>, <a href="http://blogs.forbes.com/mfonobongnsehe/">Mfonobong Nsehe</a> Unknownnoreply@blogger.com11tag:blogger.com,1999:blog-19328975.post-1579785335092128752011-04-05T17:54:00.001-04:002011-04-05T18:01:31.793-04:00One Day Without Shoes – One Day without Sense…<p>I would like to do a whole blog post on ill-conceived good intentions but for now, I will focus on the AOL/TOMS/Microsoft <a href="http://www.onedaywithoutshoes.com/" target="_blank">One Day Without Shoes</a> campaign. The goal of the campaign, as they <a href="http://entertainment.msn.com/one-day-without-shoes/?gt1=34148" target="_blank">describe</a>:</p> <blockquote> <p>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. </p></blockquote> <p>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.’ <em>Really</em> –<em> that is the whole point of the campaign</em>. Here is the video:</p> <div style="padding-bottom: 0px; padding-left: 0px; width: 425px; padding-right: 0px; display: block; float: none; margin-left: auto; margin-right: auto; padding-top: 0px" id="scid:5737277B-5D6D-4f48-ABFC-DD9C333F4C5D:34236537-ab8d-4e63-ac39-e1d0c6181ebd" class="wlWriterEditableSmartContent"><div id="7986a1e2-d903-497c-9939-2233df2c3a6c" style="margin: 0px; padding: 0px; display: inline;"><div><a href="http://www.youtube.com/watch?v=AJejcuCOC1c" target="_new"><img src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEgNcUv5SvzJ6ep-wDxIqfQRbdMltsVPNQo-0-DEby7C6KMCMmScK1xU-XkHpHZGPfVxKf4W21O1kI9O8PHjCBaaH9o2RLeAipf-QS8xirWzUJSriEkGRpIsoOSQTE1ZFdKYKyPE/?imgmax=800" style="border-style: none" galleryimg="no" onload="var downlevelDiv = document.getElementById('7986a1e2-d903-497c-9939-2233df2c3a6c'); downlevelDiv.innerHTML = "<div><object width=\"425\" height=\"355\"><param name=\"movie\" value=\"http://www.youtube.com/v/AJejcuCOC1c&hl=en\"><\/param><embed src=\"http://www.youtube.com/v/AJejcuCOC1c&hl=en\" type=\"application/x-shockwave-flash\" width=\"425\" height=\"355\"><\/embed><\/object><\/div>";" alt=""></a></div></div></div> <p>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.’</p> <p>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 <strong>that would have made a real difference in their lives</strong>. 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 <strong>you can buy lower cost shoes in these poor countries and support local entrepreneurs</strong>. </p> <p>Others have also reacted negatively to the Day Without Shoes campaign including Gawker <a href="http://gawker.com/#!5789118/put-your-shoes-back-on-privileged-techies" target="_blank">Put Your Shoes Back On, Privileged Techies</a>:</p> <blockquote> <p>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 <a href="http://www.hulu.com/watch/1047/arrested-development-lindsay-has-the-car">an <em>Arrested Development</em> episode</a>. 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 <a href="http://www.businessinsider.com/google-bonus-and-raise-2010-11">$1,000 cash bonuses and 10 percent raises</a>, <a href="http://gawker.com/#!5696434/googles-6-million-feminist-bonus-to-lady-engineer">multi-million dollar stock grants</a>, or <a href="http://gawker.com/#!5674808">company-sponsored human servants</a>. </p></blockquote> <p>So ill-conceived was this initiative that <strong><em><a href="http://goodintents.org/" target="_blank">Good Intentions Are not Enough</a></em></strong> decided to do a counter-campaign <a href="http://goodintents.org/uncategorized/announcing-a-day-without-dignity-counter-campaign-to-a-day-without-shoes">A Day Without Dignity</a> to raise awareness about wasting good intentions. They have a whole list of suggestions on their site for promoting their own <a href="http://goodintents.org/uncategorized/announcing-a-day-without-dignity-counter-campaign-to-a-day-without-shoes">counter-campaign</a>:</p> <blockquote> <p>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.</p></blockquote> <p>Someone should please tell Arianna and TOMS and whoever else is behind this thing that the idea should be to <strong>raise MONEY to fund local entrepreneurs in developing countries so that they can raise themsleves and their communities out of poverty</strong>. </p> <div style="padding-bottom: 0px; margin: 0px; padding-left: 0px; padding-right: 0px; display: inline; float: none; padding-top: 0px" id="scid:0767317B-992E-4b12-91E0-4F059A8CECA8:cf764f0c-10be-43e2-bbdf-bf8efeb081cf" class="wlWriterEditableSmartContent">Technorati Tags: <a href="http://technorati.com/tags/%23withoutshoes" rel="tag">#withoutshoes</a>,<a href="http://technorati.com/tags/day+without+shoes" rel="tag">day without shoes</a>,<a href="http://technorati.com/tags/day+without+dignity" rel="tag">day without dignity</a>,<a href="http://technorati.com/tags/arianna+huffington" rel="tag">arianna huffington</a></div> Unknownnoreply@blogger.com8tag:blogger.com,1999:blog-19328975.post-77202544423268778252011-03-31T19:55:00.001-04:002011-03-31T20:07:09.732-04:00Managing my Psychology<p>I read and re-read the post by Ben Horowitz today: <a href="http://techcrunch.com/2011/03/31/what%e2%80%99s-the-most-difficult-ceo-skill-managing-your-own-psychology/">What’s The Most Difficult CEO Skill? Managing Your Own Psychology.</a> 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:</p> <blockquote> <p><strong>‘</strong>The first rule of the CEO psychological meltdown is don’t talk about the psychological meltdown.<strong>’</strong></p></blockquote> <p>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. </p> <p>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.</p> <p>But my favorite quote from Horowitz’s article is: </p> <blockquote> <p>Tip to aspiring entrepreneurs: if you don’t like choosing between horrible and cataclysmic, don’t become CEO.</p></blockquote> <p>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.</p> <p>Horowitz ends with some nice suggestions on how to manage your psychology. His final advice:</p> <blockquote> <p>'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.”</p></blockquote> <p>I will re-read his advice every time I feel overwhelmed and the very next time I feel like a <a href="http://africanentrepreneur.blogspot.com/2011/02/doing-business-in-africa-who-is-mad-man.html" target="_blank">mad woman</a>. 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 <a href="http://aef2011.com/" target="_blank">African Economic Forum</a> 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.</p> <p><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEg_L3AOUmDLbyOag-Qa9E5qud7cuI39lXBQMMkre-MkhVLbYAL2nsKXjABZwqIels_vqm_MIjBl0n2eHF1L7tumXtB1dOJuNFjG4QC2vYvRFiHkrxUOxMp5g5cODnP4N-ebsKt-/s1600-h/image%5B30%5D.png"><img style="border-bottom: 0px; border-left: 0px; display: block; float: none; margin-left: auto; border-top: 0px; margin-right: auto; border-right: 0px" title="Twitter" border="0" alt="Twitter" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjbXakw79rujw_-GshGhuYbq89TEmBFtI00LDW3LSJ068PZJusP9rYmLUNvegz2wttYX4Dngdy2CsFDS53Vjkb4xdd6ixut2t8W8MdMrTiOiEE3vGyS06JB1ftb7hUOjNkoz3o0/?imgmax=800" width="406" height="180"></a> </p> <p> 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. </p> Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-19328975.post-20803578670598144342011-02-03T16:57:00.002-05:002011-02-04T11:03:51.677-05:00Doing Business in Africa: Who is the Mad Man – or Woman?<div dir="ltr" style="text-align: left;" trbidi="on"><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">We have a common saying in this country: “if you are swimming in the river, a mad man comes and steals your clothes and you leave the river naked to run after the mad man, who is really the mad man?</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">I am feeling a lot like the man (in this case woman) running naked after a mad man to get my clothes back.<span style="mso-spacerun: yes;"> </span>That is what it feels like to try to do business ethically in this country. </span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">When crooked competitors win contract after contract while you struggle do make ends meet, <em>who is the mad man?</em></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">When a customer tears up a payment because you refuse to bribe the accountant and says “see how you will get paid now,” <em>who is the mad man?</em></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">When thugs working for an “enemy” are allowed to break down your door and assault you, the police comes and tells them “go home” without any punishment because you don’t bribe them, <em>who is the mad man?</em></span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">Perhaps what makes me even more the “mad woman” is that I still think something is wrong with the way the system works but I still persist in going against it. </span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">I run after the mad man when I speak out about the lost contract, raising examples of unethical behavior – when the decision makers were certainly in on the deal.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">I run after the mad man when I sue the customer to get my payment – in a corrupt judicial system that will drag the case on for years before eventually awarding me a judgment I can’t execute.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">I run after the mad man when I protest to high level police officials – who tell me to go get my own thugs.</span></div><div class="MsoNormal" style="margin: 0in 0in 10pt;"><span style="font-family: "Arial", "sans-serif";">The examples are many. The point I am trying to make is that running counter-culture means running after the mad man. In the end, you are the one that looks stupid, the one that doesn’t get paid, the one that doesn’t get the contract, and the one that can’t get help from the police. I have frequently gotten laughed at to my face for refusing to bribe. And honestly, I begin to wonder if I am not the crazy one. </span></div></div>Unknownnoreply@blogger.com9tag:blogger.com,1999:blog-19328975.post-18239145434643542522010-10-18T08:40:00.000-04:002010-10-18T08:40:37.492-04:00Fight for your Principles, Fight a SystemI have learned that the more I am able to get around corruption, the more I am able to overcome systematic hurdles, the more attacks I should expect. At first, I anticipated that my adversaries would be the ones to launch these assaults, and they have. I remember in one legal dispute, my opponents took out full page ads in all the country’s newspapers and ran them an entire week, attacking my company’s integrity. Those types of attacks are normal and expected. <br />
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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. <br />
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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 – <strong><em>anyone</em></strong> – could get around their system causes collective panic and leads to numerous forces working to protect this order of things. <br />
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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.” <strong><em>Doing the right thing is so costly, so exhausting that it becomes a luxury</em></strong>. 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.<br />
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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. <br />
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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. <br />
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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. <br />
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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 <strong><em>not</em></strong> 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. <br />
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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. <br />
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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. <br />
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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.”<br />
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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. <br />
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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 o<span style="font-family: inherit;">the</span>r 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 <span style="font-family: inherit;">ability to function normally <span style="font-family: "Calibri", "sans-serif"; font-size: 11pt; line-height: 115%; mso-ansi-language: EN-US; mso-ascii-theme-font: minor-latin; mso-bidi-font-family: "Times New Roman"; mso-bidi-language: AR-SA; mso-bidi-theme-font: minor-bidi; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin; mso-hansi-theme-font: minor-latin;">– </span><em>meaning against the system's interests</em></span><span style="font-family: inherit;">.</span><br />
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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.”Unknownnoreply@blogger.com10tag:blogger.com,1999:blog-19328975.post-28058147643611707922010-07-16T17:12:00.000-04:002010-07-16T17:12:53.856-04:00Overcoming Corruption, Just this once... Maybe. Just Maybe.A few years ago, our company was ordered to pay the current equivalent of $350,000 in an employment lawsuit. I blogged about it at the time. “<a href="http://africanentrepreneur.blogspot.com/2006/12/do-me-favor-dont-do-me-any-favors.html">Do me A Favor, Don’t do me any Favors.”</a><br />
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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.<br />
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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.<br />
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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.<br />
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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. <br />
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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. <br />
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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. <br />
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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. <br />
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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. <br />
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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).<br />
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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.<br />
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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…Unknownnoreply@blogger.com6tag:blogger.com,1999:blog-19328975.post-35824112706360855852010-06-09T12:47:00.000-04:002010-06-09T12:47:03.042-04:00Bidding for World Bank Financed Project: An Exercise in FutilityAny company or organization that has submitted a bid for to a large organization, especially when the funding comes from international sources, is aware that the results are often decided before the RFP is even drafted. The Request for Proposal (RFP) is generally designed so that only a pre-determined bidder can meet the requirements. This does not only happen in Africa. We have seen this occur even in the US and Europe. I remember a seminar for Federal government contractors in the US during which the main speaker said that “if you’re not 70% sure that you will win, don’t bother to bid.” <br />
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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. <br />
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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. :) <br />
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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.<br />
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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. <br />
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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. <br />
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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.<br />
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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. <br />
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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.<br />
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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?Unknownnoreply@blogger.com4tag:blogger.com,1999:blog-19328975.post-32146136792159638822010-05-26T06:05:00.000-04:002010-05-26T06:05:05.699-04:00Being Blackmailed into Tax Fraud<div class="MsoNormal">In this African country I am in, tax officials do everything within their power to push honest taxpayers into fraud. They do this so that the taxpayer becomes out of compliance and can then be blackmailed into bribes.</div><div class="MsoNormal">A couple weeks ago, our company signed a new corporate lease for the building we are in. We extended the lease term to 10 years and we expanded the amount of space we were in. Our contract calls for our rent to be paid monthly in advance.<br />
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</div><div class="MsoNormal">The law requires that all contracts be registered with tax officials within a 30 day period from signature. The registration fee is equal to 5% of the yearly lease amount and it must be paid every year and <b><i>in advance</i></b>. </div><div class="MsoNormal">So when we went to the tax office to register our new lease yesterday, we went prepared to pay the 5% of the yearly lease amount. Let’s say our rent is $1,000 per month, which comes to $12,000 per year. That would be a $600 registration fee.<br />
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</div><div class="MsoNormal">After looking at the content of the lease, the tax officials told us that since it was a commercial lease, the tax is 10% annually and not 5%. So this morning, we returned to the tax office with the 10% fee which, based on our example, is $1,200.<br />
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</div><div class="MsoNormal">Well, as if that is not enough of a hindrance for taxpayers, the tax officials informed us today that since the lease is for 10 years, we must pay<b><i> in advance</i></b>, <b><i>the tax for the 10 years</i></b>. In our same example, this would mean $12,000 in taxes to comply to register a lease for which monthly rent is $1,000!<br />
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</div><div class="MsoNormal">We don’t think this is true. But the tax officials are refusing to register the lease. They will probably continue to refuse until the 30 day period is passed. After the 30 days, there is a 100% penalty. This means that whether we have to pay the registration tax for 1 year or 10 years, the fee will be doubled. So we will have to pay, under the example, $2,400 or $24,000 to make legal a lease for which rent is $1,000 a month.<br />
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</div><div class="MsoNormal">Of course, the tax officials will then propose an easier, less expensive way, through bribery. We have decided not to give in to the blackmail. We will pay an amount equivalent to 10% in tax and get our receipt, even if they don’t register the lease itself.<br />
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</div><div class="MsoNormal">It is exhausting to try to fight corruption day in and day out. It would be so much easier to go with the flow. We are continuously “punished” for trying to do the right thing. I wonder how much longer we will be able to resist…</div>Unknownnoreply@blogger.com7tag:blogger.com,1999:blog-19328975.post-81946054361680573892010-03-25T13:47:00.001-04:002010-03-25T13:49:10.422-04:00Judicial SoftwareI have started working on my project to develop a software application to manage court systems. See earlier blog post: <a href="http://africanentrepreneur.blogspot.com/2010/02/judicial-corruption-and-what-can-be.html.">Judicial Corruption and What Can Be Done About It</a>: <br />
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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.<br />
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We expect to be done with the first phase of the project by the end of 2010. <br />
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If you know of any similar application currently being used in an African country, can you please post a comment?Unknownnoreply@blogger.com62tag:blogger.com,1999:blog-19328975.post-45870258188302304842010-03-25T13:32:00.000-04:002010-03-25T13:32:25.496-04:00When Your Employees and Customers Unite to Defraud YouOur main Cisco router recently died. We have had it for many years and it was due for an upgrade. We contacted a few of our current suppliers to get quotations. One, we’ll call ABC, sent their regular sales representative who spent some time discussing our needs. Within a couple days, we received a quotation from the sales representative. Interestingly, it was in the sales rep’s <strong>own personal name</strong>! He has a small business on the side, doing exactly the same thing that his employer ABC does.<br />
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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. <br />
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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. <br />
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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.<br />
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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.<br />
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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. <br />
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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 <strong>our salesperson had set up with the customer’s IT director</strong>! 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!<br />
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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. <br />
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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. <br />
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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. <br />
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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.Unknownnoreply@blogger.com19tag:blogger.com,1999:blog-19328975.post-42733293683613922492010-02-20T07:32:00.000-05:002010-02-20T07:32:20.108-05:00Judicial Corruption and What Can be Done About ItThe judicial system in this country is one of the most corrupt segments of society. Yet, I have never heard of a judge being arrested or charged with corruption.<br />
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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.<br />
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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. <br />
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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. <br />
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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.<br />
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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:<br />
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<em>On this day ….[3 months after my Dad died] Before us, appeared publicly….</em><br />
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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.<br />
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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. <br />
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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. <br />
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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.<br />
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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. <br />
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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.<br />
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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. <br />
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This last time, I spent two hours in his office trying to console <strong><em>him</em></strong>. 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.<br />
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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? <br />
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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. <br />
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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. <br />
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So I better start forging ahead with my judicial application…Unknownnoreply@blogger.com13tag:blogger.com,1999:blog-19328975.post-91311060465092859282010-02-18T08:16:00.001-05:002010-02-18T08:21:18.858-05:00Finally! A Change in the Tax Law That Makes SenseOne of the things that has most frustrated me about this country over the years is that a company cannot file its yearly tax return itself. To submit your tax return to the tax authorities, it must be certified by an approved chartered accountant.<br />
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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.<br />
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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. <br />
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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. <br />
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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.<br />
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I just noticed in the new 2010 tax laws that this certification is <b>no longer required</b>. 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.<br />
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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.<br />
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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. <br />
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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.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-19328975.post-82492459226806265522010-02-16T06:04:00.000-05:002010-02-16T06:04:49.084-05:00Paying for Air or a New Utilities Billing ConceptOur office here just received its monthly water bill a few days ago. About $30. This is a lot for an office and it is twice what we were paying about a year ago. Worse, the water service is so infrequent that we often go several days with no running water. I asked our accounting manager why the sudden jump in the cost when we were using less water. <br />
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The accountant explained that we were <b>paying for air</b>. 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. <br />
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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. <br />
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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!<br />
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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.Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-19328975.post-84430514354269971182010-02-08T10:20:00.000-05:002010-02-08T10:20:00.054-05:00Business Insider Article on Corruption in Africa<a href="http://www.businessinsider.com/">http://www.businessinsider.com/</a> recently published an article on corruption in Africa. <br />
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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. <br />
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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.... <br />
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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. <br />
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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.Unknownnoreply@blogger.com3tag:blogger.com,1999:blog-19328975.post-24750769161042418342010-01-27T07:46:00.004-05:002010-01-27T09:05:13.586-05:00Treading the Muddy Waters of CorruptionPeople often ask me how I manage to keep my "no corruption" stance in an environment in which corruption is the rule and not the exception.<br /><br /><span style="font-weight: bold;">1. My first strategy is to "sell" this concept to my staff. </span><br /><br />Most people from this country are accustomed to business being done in a corrupt way. Even when they don't like it or agree with it, they often go along with it just because the alternative seems too hard. The way I sell it is by example; and over time, they see the benefits of the strategy. For instance, taxation officers tend to drop by on Friday afternoon and threaten to seal the office if they are not given their "weekend allowance." We simply say no and agree to be shut down. Others who fall into the trap do give the "allowance." Sure, the tax officer who received the gift will not come back for a few weeks but he will send the word out to his colleagues and they will visit one at a time to get their piece of the pie. In our own case, after a few times of not getting anything, they simply stopped coming. They really don't bother us anymore.<br /><br />There are many other examples too of employees seeing that a no corruption rule can be beneficial. We have actually won contracts <span style="font-weight: bold; font-style: italic;">because </span>of our policy (although we have lost more than won).<br /><br />I also try to position our policy in a greater context to our staff. We often have discussions on the ills of corruption and how this negatively affects the development of our country. I explain how we are too good to participate in that game and if any company can have such a stance, it is us. If we can't, how should we expect companies with fewer resources to do so?<br /><br />This staff by-in is essential to make the policy work. They are on the front-lines and are getting the push back. They lose deal after deal as a result. If they do not firmly believe we are doing the right thing, then we cannot succeed.<br /><br /><span style="font-weight: bold;">2. I am always ready to walk away from a deal</span><br /><br />Sometimes, the corruption is more insidious. You think that you are dealing with people with integrity and you proceed with the proposal with that in mind. At some point, even far down the line, some clients become strange. There are unforeseen delays; they are having personal financial issues; the client boss wants to meet the supplier boss in person... There are a number of signs that point to clients wanting you to come forward with an offer for a bribe. When I see such signs, I just walk away. It is just better that way. If they want a bribe at the proposal stage, even if you get around that somehow, they will get you at the payment stage. Just not worth it. We lose lots of deals this way.<br /><br /><span style="font-weight: bold;">3. I try to maintain relationships unrelated to deals or services</span><br /><br />The best time to offer a gift to a client or a government official is when you don't need them for anything. Even here you need to be careful with the gift so that it is not misconstrued. I will personally select a book or other inexpensive item that is of personal interest to the person receiving it. People love pens. We had some nice logo pens made and we give them out as gifts. If there is a deal on the table, no pen. This is simply because some clients might interpret this as an incentive and the beginning of bigger and better things. When you don't follow the pen with a more significant "gesture" they see this as an insult.<br /><br />Another present people just love is Obama gear. So I brought some back after the inauguration and they were thrilled.<br /><br />I am not a phone person. I hate the phone but I do try to call government officials from time to time just to say hello. People really appreciate this. I prefer email so when I know that they read their email, I will send a quick hello from time to time.<br /><br />Another one of my favorite gifts is prepaid phone cards. This is not expensive and people really appreciate it. I usually tell them that I would love to hear from them from time to time but that I know it is expensive for them to call. They still "beep" -- <span style="font-style: italic;">beeping is calling briefly to let their number appear on your caller-ID and then hanging up before you pick up as a sign for you to call since only the caller pays</span> -- but they will often do so to give heads up on a matter of interest to you.<br /><br /><span style="font-weight: bold;">4. Do Say Thank You (and not just with words)</span><br /><br />There have been times when people have gone out of their way to help us. This is both in the business sector and in government. Although this is not allowed in the US, we do sometimes say thanks by offering a gift, sometimes even cash. (I know!!! Not me!!!). This is very delicate and has to be done very carefully. First, this can only happen if there is no expectation of any type. If there is an expectation, then it can't work and you get caught up in the game.<br /><br />Second, it must be separated in time enough from the act that it is not seen to be a pay-for-play deal. Let me give you an example. Court judgments here take sometimes months to get typed up and registered. Until that happens, you just can't execute. We had some a judgment that we needed typed. The court clerk, who had been very friendly with us offered to stay after hours to type it. He said that this was because he had followed the case and really felt bad for us. No expectation. More than a year later, I purchased a cell phone and gave it to that Clerk. It was my way to say thank you. I am his hero now.<br /><br />Third, this is usually only for lower level staff that are not implicated in the decision-making. This is a secretary, or a security guard, or a similar position where they assisted you in making something happen faster or giving you pointers. For example, with one client, there was a guy working in the IT department with no real title. The guy really liked our solution but he was not part of the decision-making process and had no authority. In fact, he knew from working with that agency, that we would never be selected. He gave us a few tips on how to make sure that our proposal got to the right people so that the decision-makers would be forced to explain why we had not been considered. Using his advice, we won. Well after the project was done and over with, we thanked him with a cash gift. He was getting ready to leave the agency and try to set something up on his own. The cash was what he needed.<br /><br />There are even times when we have provided a gift to a decision-maker (I know... I know, digging deeper into the mud). This happened twice. In both instances, they were no longer in their capacity when we "thanked" them. They were very surprised and very grateful. And in both cases, they had really helped us a great deal, even at personal cost when everyone else seemed against us. Each time also, they never asked for anything or acted in a manner which led us to believe they had any ulterior motive.<br /><br />I know a lot of people will say that it is a form of corruption. I struggle with it myself to be very honest. I worry that the recipients of the gift might expect us to do this every time. We have not run into many problems but it is still a concern.<br /><br /><span style="font-weight: bold;">5. Little Corruption is Big Corruption</span><br /><br />One of the most annoying type of corruption in this country is what they call the "mange-mille" which translates as "eat-1,000." These are the police who are on the side of the road and will harass you until you give them the equivalent of $2 or more. I have sat in my car for over an hour refusing to give in before they finally let me go. Once, they stopped me and when they saw I had all my documents, they asked for my yellow-fever vaccination certificate. Believe it or not, I had it with me much to their displeasure. Another time, they wanted to cite me for having a suitcase in the back seat. They said that this required a special license to carry mixed cargo (people and goods). I refused to pay. I missed my plane.<br /><br />This is such an annoyance that most people just pay. What I find though is that once you start justifying the bribe with "it saves me time" arguments, it becomes easier to use those same arguments when the stakes are higher. I know lots of fellow Diasporans who returned to this country with the same "no corruption" philosophy. Then they gave into the police to avoid the hassle; pretty soon it was the customs officials at the airport to avoid paying custom duty; then they started to justify paying the phone company technicians to install a line faster; and then it goes on and on and on... Within a year, they are fully in the system.<br /><br /><span style="font-weight: bold;">6. Be Beyond Reproach</span><br /><br />You can't very well complain about police harassment when your papers are not in order; can't complain about courts being unfair when you are on the wrong ; can't complain about tax authorities when you don't pay your taxes.<br /><br />As a result, you have to ensure that you are always on the right side of the law. In this country, dual-citizenship is not allowed. I have a US passport. I could get one from this country in a day. But that would set me up for being in an irregular situation. Therefore, I apply for and pay $500 for a residency permit every two years. All our employees, including our cleaning staff and security guards are registered with the government. We cover all their withholdings so that their net salary is what it would have been had they been paid under the table. We file our tax returns<br />monthly no matter what, even when we can't pay them right away. If we are in a legal dispute and we are wrong, we settle. Sometimes even when we are right we try to settle because Court in this country is HELL (see justice heading for more on that).<br /><br />The beauty of being beyond reproach is FREEDOM. It is wonderful. We are certainly poorer in financial terms for it but nothing can match the feeling of being FREE. I sleep well at night. My conscience is clear and I know that I am doing my part, as small as it might be, to try to make this country a better place.Unknownnoreply@blogger.com5tag:blogger.com,1999:blog-19328975.post-30422284072643347702010-01-27T07:10:00.005-05:002010-01-27T07:45:34.960-05:00Some Progress with Internet AvailabilityOne of the greatest frustrations in living and working in this African country is access to internet at decent prices. About a year ago, a new provider came in with a huge campaign for the mass-market. Others have tried before but this company seems to have been quite successful. In fact, in a little over a year, they have signed over 25,000 customers. This may not seem like much but when you consider that there are only 100,000 total fixed telephone lines after 50 years, you can quickly see how 25,000 customers becomes important.<br /><br />A customer first has to buy the equipment; a book size modem for about $150 or a small USB flash card sized modem for about $20. The smaller modem is definitely cheaper but the reception is not as good. Then customers buy prepaid cards denominated between about $2 and $50. the $50 card gets you unlimited usage for 30 days. The other cards have a per minute cost. For about $10 you can get about 16 hours of usage. This is really not bad at all.<br /><br />The modems work in the three cities and there are plans to deploy to several other smaller towns within the next few months. The speed is pretty slow but fast enough for basic browsing and email.<br /><br />The other day, I was passing by some security guards. One should note that security guards here make about $60-80 per month so they are on the very low end of the salary grade. But I overheard one explaining to the others how this modem worked and how he could connect for about 30 minutes at a time and get everything he needed done. That is the most exciting part of this solution. It will allow greater internet penetration to sectors of the population who could simply not afford to have the internet installed at home.<br /><br />Since internet use is "socialized" one connection will serve several people. In one study I saw, one internet connection served an average of 12 users.<br /><br />This important price decrease has not extended to the business sector where prices still seem exceedingly high. The provider I mentioned in this post recently extended its offerings to the business market. We asked for a quotation. They sent us a proposal for a one year commitment at $900 a month before tax (almost $1,100 including tax) for a <span style="font-weight: bold;">256k</span> connection! Come on y'all.<br /><br />So as you can see, there is still some ways to go but I am pleased that we seem to be heading in the right direction.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-19328975.post-63209915757582922452010-01-27T07:09:00.002-05:002010-01-28T06:37:28.579-05:00TwitterI finally broke down and created a Twitter account. You can follow me on @africatechie.Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-19328975.post-67706605348472394532008-04-10T08:15:00.005-04:002008-04-10T09:45:00.806-04:00Electric HellNot a day goes by when we don’t have to deal with issues that are just not issues in the US. Between the tax guys, the water guys, the Internet guys, and the electric guys, you need a whole team of administrative folks just to spend time dealing with them.<br /><br />Electricity is very erratic; blackouts and brownouts are common. We estimate our direct losses due to power surges at over $30,000. This is mostly computer equipment but also air conditioners that were damaged or destroyed after frequent power surges<br /><br />In any case, it is not bad enough that we lose money to their power surges or from days of going without power or the cost of buying and maintaining a generator, the day-to-day service is even worse and the cost is excessive, not to say abusive.<br /><br />Our average electric bill is roughly $1,200 a month. This is for about 4,000 kwh. Of that, about $245 is fixed. This means that if we use absolutely no power, we still have to pay for the meter rental (about $5 a month) and a “fixed premium” ($240 a month) which no one will explain to us. The bills are payable within 10 days. Cash or certified check. There is no late notice. They just disconnect your service. The problem is that the date on the bill is usually a week or more before you actually get the bill (they are hand delivered and not mailed) so in fact, you have a day or 2 to pay your bill before facing disconnection. And despite their inefficiencies in providing poor service all around, they are extremely effective is sending out teams of disconnection agents who go as far as removing the meter.<br /><br />In March, we received a bill that was much higher than average. It was about $1700. It was dated on the 2nd but we received it on the 10th. On the 12th, we wrote to the electric company asking for an explanation for the excessive bill, an explanation for the so-called “fixed premium” and for additional time to pay. They refused to take the letter. Simply refused. After spending hour after hour, day after day at the neighborhood branch trying to meet with the branch manager or getting a letter delivered, we finally gave up and tried to pay the bill. We couldn’t. Our account had been cancelled. No reason. No explanation. A couple days later, technicians from the electric company came with a note from the branch manager requiring we prove that we had a legal connection. They wanted to remove the meter since we had “no account”. We gave them all the required documents and they eventually left.<br /><br />Still unable to meet with the branch manager and unable to have any letter accepted by the receptionist, we took a bailiff with us to the branch. We were allowed in and were able to meet with the branch manager. After a long discussion that was going nowhere, we still did not know why or when they cancelled the account. The branch manager asked us to fill out an application for a new account and pay the required fee, almost $900 to get the same subscription load we have now.<br /><br />So let me get this straight. You cancel my account for absolutely no reason and for me to get another account I have to REAPPLY and PAY AGAIN!!!! I was trying my best not to reach over his desk and slam his face into his PC. The colleague I was with stayed calm and the bailiff was just shaking his head in disbelief. Seeing our “reluctance” the branch manager went so far as to suggest we could hand write the application not to waste any time.<br /><br />We asked that they give us a written explanation for the cancellation of our account as well as putting in writing that we needed to sign up for and pay for a new account.. We told them that we would have to justify to our “management” why we needed a new subscription when we had already paid for one in the past. He refused saying the receipt for the new connection fee would be the only thing we would have and that we could send that receipt to our management if they wanted. In the meantime, his agents were coming around to our office to remove our meter since we are using it illegally. Fortunately, we locked the main access to the building and have refused to let them in. They can disconnect us from the pole but it is more complicated and it will take them a few days.<br /><br />After leaving the branch yesterday, we wrote a letter to the branch manager and had it delivered by our bailiff this morning. Our bailiff spent over and hour and a half listening to the branch manager’s explanations. He came back saying that the branch manager told him that he had received instructions from his head office to cancel our service and that since it was cancelled, the only solution was to reapply and pay again. He “generously” offered to give us some time to pay for the connection fee as long as we reapplied now. Of course, this was unacceptable to us. We managed to get the branch manager on the phone and we asked him for the contact at his head office we could get the explanation from. He completely changed his story and now claimed that the head office had nothing to do with it.<br /><br />Since our last letter was delivered by bailiff, they will have to answer. In the meantime, we are illegally using electric power which we paid over $2,400 at the time to get installed and we could lose power at any moment.<br /><br />This place is truly hell.Unknownnoreply@blogger.com7tag:blogger.com,1999:blog-19328975.post-13709763972082210202008-03-11T12:44:00.003-04:002008-03-31T12:09:08.991-04:00Changing Internet ProvidersWe decided to change internet providers. Our current provider does a pretty good job but at the US $ equivalent of almost $2,000 a month for a 256k connection, it was just too much for our budget. We found another provider (call them OW) that could provide a dedicated 128k connection at a little more than $400. Since the connection is dedicated, we should get roughly the same bandwidth with OW as with the 256k shared we got from the current provider.<br /><br />We had contacted OW a few months ago and they had given us a quotation that was even higher than our current provider. When we decided last week to look for alternatives one of our interns told us his dad could get us a connection very fast. It turns out that his dad was merely an unofficial reseller for OW. But since our name was not mentioned by the Dad when OW gave him the quote, he was able to get a much better quote than we ever could <em>(people just assume that we are incredibly rich and quotations here are often based on who is buying and not what is being sold)</em>.<br /><br />OW was definitely a little disappointed to find out we were the client. They thought they could have gotten a much higher rate from us. Anyway, their claim to fame is to get you up and running the same day. We placed the order on a Thursday. No installation. They promised to do it on Friday. No installation. Then they promised to come on Saturday. No one showed up. Yesterday, we finally wrote a letter to them saying that if the installation was not complete by 3 PM, we would cancel and they would have to refund the entire installation fee and one month prepayment we had paid (installation cost was over $700 even after negotiations). Their manager agreed to have everything done by then. No one showed up until 2:30 PM. They started working on the roof to set up their equipment. Until 8 PM they were still on the roof. They promised to come this morning by 7 AM to continue. They did not arrive until 10.<br /><br />A couple hours later, the technical manager comes to see us to explain that they would not be able to install the equipment after all. Their installation requires line of sight and there was a tall building between us and them (I guess they had never noticed it before now) and their equipment would not be tall enough to overcome that. So we have this gigantic beam on our roof that they now have to remove.<br /><br />We had already cancelled service from our previous provider and we have no internet. Our second choice was with the state owned telecom. They are the exclusive provider of fiber optic service to the other ISPs and are themselves providers using ADSL. The paperwork to get a connection reads like a loan application. In addition to certified copies of this and that, they want photographs of the top manager as well as a copy of his national identity card. We have been customers forever since they have exclusivity over land lines but we don’t exist in their internet system and have to apply like everyone else. The application has to be accompanied with payment (cash or certified check) for the installation charge and one month of service. Then, they send the application to another city where their headquarters are for processing. The application then comes back and we wait until they have an “available port” to connect us to. They are suggesting two or three weeks. That is civil servant speak for “You will get connected in a few months if you are lucky but if you give me enough money I can move your file up and you will get your connection in a week.”<br /><br />I am not sure what we will do. We might bite the bullet and go back to our previous provider. So frustrating. Such an essential element of development is incredibly expensive and difficult to obtain. There must be a better way.<br /><br /><em>Update: We went back to our original provider. Unfortunately, the new provider had sabotaged the original installation (removed the antenna, cut cables, disabled the radio) and after 2 weeks, our former provider is still working to fix the problem. So still no Internet. </em>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-19328975.post-1260710324726133742008-02-14T06:12:00.005-05:002008-02-14T08:42:59.306-05:00Fiscal Tyranny (Part 1)Yesterday, our tax adviser stopped by for a meeting to discuss our monthly filings. A meeting that was intended to raise her concerns about hotel bills turned into a philosophical discussion about taxes in this country.<br /><br />Our tax advisor’s specific concern was that we had paid hotel bills for some people but that our records did not reflect a contract for those people or any consulting payment to them. Our explanation to her was that these people were company staff in the US and Europe who had travelled to our country to provide sales and technical assistance just made it worse. That meant that we needed to pay a technical assistance tax of 15% for those individuals. We explained that they were employed by our US and European entities and therefore there was no fee to be paid by our local entity and 15% of 0 was 0.<br /><br />She explained that this would never fly with the tax authorities. We needed to draft a technical assistance contract for their work with an estimation of the value of their services even though the services would not be paid for. She also warned that without those contracts, we would likely have to pay for payroll related taxes for those individuals even though they are not on our payroll. Of course, once a contract is established, it needs to be “registered” with the tax authorities and the “fee” is 2% of the value of the contract. If the contract was registered late, then there is a 100% penalty for the fee. There are also taxes on the fees which are about 50%. So really you are paying 3% or 6% if you register more than 30 days after the work is performed. If the amount is under the $US of $10,000 then the registration “fee” is actually 5% plus the taxes, all doubled if you are 30 days late.<br /><br />So because we wanted to reinforce our local activities with resources who came in from overseas we now had to pay thousands of dollars in taxes for services which we never had to pay for out of our local coffers.<br /><br />This was insane but very logical to this poor tax advisor who was just doing her job. She was so enmeshed in the tax code and the way of doing business in this country that she was oblivious to the madness of the tax code and surprised that we objected to it. She really believes that this is the way business is done all over the world and she said that we were the first to complain not just about the process (will blog about that another time) but about the tax structure itself.<br /><br />And that is the real problem. It is impossible to make real progress when most stakeholders do not understand that business as usual in this country is detrimental to our development. Everyone focuses on enforcing the current system and or complaining about the heaving handed collection process. But what is needed is a complete change in mentality. Taxes, fees, duties are not elements of progress for business but elements of repression. This by itself is not unique to this country. Business people all over the world complain about taxation and regulation. The state of Maryland, where our business was started, has just instituted a sales tax on computer services amidst an uproar from the tech community. Where this becomes insidious in a developing country like the one I am in is that the complexity and multiple layers of taxation are taken as an opportunity for tax officials to personally enrich themselves. The more complicated the tax structure is, the more repressive it is, the more taxpayers will look for ways to cheat and tax officials are all too happy to assist them in that manner… for a personal fee.Unknownnoreply@blogger.com1