“Your problem is you’re a missionary, your wife will leave you and you’ll never succeed at this,” Shaun told me—a decamillionaire investor—after a few drinks🍻 at a recent conference.
Maybe... But there are a few things I think he is missing.
First some background…
We had our final event for Kuzana batch1. What a great event!
Thanks everyone.
We wanted the bizi (investees) to grow. But we didn’t expect THIS much growth. All the bizi doubled revenue in just 4 months.
We also had a lot of fun. The Kahoot startup Trivia game was a hit, and the winners celebrated their victory…
Kuzana batch1 led to our first national TV appearance where two bizi CEOs and I were on the national TV station for an hour for BizCheck program.
Based on the strong results of batch1, we launched the applications for batch2 with the final deadline May 31st. Apply here.
After batch 1, my key takeaway was that money alone is not enough: many companies that raised $10m or $100m in Kenya have gone under. I have raised $20m for companies in Africa, but ultimately, was all that money used well? A lot was for satisfying donor demands and reporting. Moreover, when you raise a lot of money, it wants to be spent. Investors just spent 2 years developing a plan; if you come back in a week with a different direction it becomes hard to turn the ship—even if that’s what needs to be done. Companies lose their nimbleness and “stick to the script.”
So, how did all the Kuzana bizi double their revenue in just 4 months?
It’s hard for Kuzana to take any credit for the phenomenal growth. We invested very little money. And most of that money came at the end of the program, not the beginning. As cheesy as it sounds… community!
In running the first 12 week batch, we realized 3 things are more important than money:
Focus
Professionalization
Community
Focus
The cheetah that chases 2 gazelle catches none.
As entrepreneurs, we tend to have 27 new business ideas before breakfast. Many of them might actually work. But if we try all of them none will work.
Did you know entrepreneurs have 4x the incidence of ADHD compared to the general populace? It’s a blessing and a curse. In the beginning, it's important to try lots of different things and not get too hung up on one crazy idea.
But there comes a time we have to FOCUS or wander forever in the wilderness.
At Kuzana, we ask founders every week what their ONE THING is. This mirrors how Peter Thiel gave every employee ONE THING to do at PayPal. If it’s not a founder's one thing, is it really worth talking about? There always is ONE bottleneck in any business, usually something the founder is avoiding.
Focus is simple: just cut everything that not related to driving the main business. It’s like a breath of fresh air for founders.
Professionalization
Imagine you’re on the beach in Diani. How long will it be before you get an emergency phone call from your team? Then you’re on the phone, back in the hotel, sorting out the issue and your vacation is ruined.
What got you here won’t get you there.
You can dodge paying the taxman while you’re small but once you start to succeed KRA will come knocking, my friend. And we don’t want to invest in CEOs who go to jail.
We provide 12 months of free accounting. Entrepreneurs can finally steer their ship with a map. As investors we get accounts done by the 5th of each month, which I doubt any other investor can claim.
Community
Perhaps most importantly, as entrepreneurs, we want to be independent, but as humans, we crave connection. We cannot share our problems with our employees, customers or suppliers. We can only share our problems with our spouse so many times before we start to create new problems.
You’re the average of your 5 closest friends, the saying goes.
What if those friends were other successful entrepreneurs? Who motivated you? Believed in you, shared their problems and solved your problems too.
“When you put ambitious people together, they bloom like dying plants given water.” Paul Graham, YCombinator co founder
So why did Shaun think Kuzana is a mistake (real decamillionaire investor acquaintance, fake name)? He is a serial entrepreneur from the US who had invested in impact business in Tanzania.
“You’ll never reach your goal of becoming a decamillionaire”
“Africa, lol, wrong market”
“Your wife will leave you. There’s no honor in being poor.”
“You need control.”
Here are some of the mistakes I think he made:
Tanzania is a much less mature market than Kenya. You can’t easily get money out of TZ, whereas I have moved money in and out of Kenya with ease.
His “Impact” business sold expensive solar to low income people. We buy from low-income people, providing employment, and sell to rich Nairobians or those in Europe and the Middle East with greater purchasing power. They were trying to squeeze water out of a rock; we are catching rain with as many buckets as we can find.
There is a Carrot and a Stick for control. They focus on the stick. But we focus on the carrot—strong communities you wouldn’t want to screw over.
If I ask you which country has a stronger sense of community, Kenya or the US, I don’t have to answer for you to know. And yet we force the American way of doing things on a very different culture. Why not leverage Kenya's existing strengths?
Share this with a friend. Think about how you heard of Kuzana—it was probably through a friend. Pay it forward and send this email to a friend—it would mean the world 🌍 to me, and might change their life too.
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