Here are stories from some of the most dynamic African entrepreneurs. They share the toughest situations they’ve found themselves in as business owners, and how they overcame these challenges.
1. Isaac Kwaku Fokuo
Isaac Kwaku Fokuo is the founder and principal of Botho Emerging Markets Group, a strategic investment advisory firm specialising in emerging markets, with its head office in Kenya.
One of the toughest situations I have found myself in happened when the company was fairly young, and we were working hard to establish our presence on the continent and build our client base. During this time, I was offered a potentially lucrative project that would have made a significant financial impact on the company.
This project would not only have given the company the financial boost any company in its growth stage needs, but it was also in an area that we were particularly keen on venturing into. There was just one problem with this opportunity – I was expected to bribe a few people to get the contract.
I remember speaking to a trusted friend who gently pointed out that a decision to pay off these people may have negative ramifications. He did not tell me what to do, but he reminded me what my values are.
I declined to take on that project and, even though it took us a while to get another contract, the ability to say no even in the face of potential financial distress has remained a core, uncompromised value for me. In this journey of entrepreneurship, I believe there is great value in having the right people around you who serve as a voice of reason in difficult situations. Read the full interview.
2. Ameer Sherif
Ameer Sherif is the CEO of BasharSoft, a company that runs Wuzzuf and Forasna, Egypt’s job vacancies and careers websites.
Back in January 2011, we made our first product launch, days before Egypt’s revolution.
[The] internet was cut off for almost three weeks, funding from our government incubator was disrupted and many businesses suspended their hiring for months due to the instability. [This was] not lucky timing to launch an online jobs marketplace.
Since then, Egypt went through years of political and economic instability. Local funding was scarce and regional investors were sceptical of investing in Egypt. We were out of funding. [There were also] … no clients or users to help us iterate on and improve our newly launched platform.
At times, we didn’t even have enough cash for office rent and had to change offices five times in two years. We borrowed money from family and friends, and went deep in debt with no success generating revenue to cover us.
We did some custom software solutions on the side to buy time. We were seriously considering closing down the business multiple times in 2011 and 2012. I went interviewing for a role in a big four management consulting firm in Dubai in late 2012, but didn’t pass the final interview.
Despite the lack of funding, accumulation of debt and social pressure to move on, our small team managed to bootstrap with minimal resources to iterate on improving our platform in the hope of getting Wuzzuf to product-market fit.
We were sure we’re solving a problem: job matching and unemployment in a country with a population of 100 million people. Companies were still using printed newspapers and classifieds for job postings, which was inefficient. But the revolution actually had a positive side, internet penetration grew rapidly.
[The] … initial team was determined to carry on. [In] mid-2013, we reached ramen profitability, US$10,000 of revenue per month, barely enough to cover our small salaries and expenses for a team of seven.
It’s only then I considered searching for global investors since I failed at fundraising from 100 local or regional investors I had pitched to [in] … three years. I searched online and found a Silicon Valley fund, 500 Startups, that started investing in early stage startups globally. I applied for their accelerator programme online and got the usual rejection.
In late 2013, Con O’Donnell convinced me to travel to Jordan for a pitch event. O’Donnell was one of the early entrepreneurs who had a successful exit locally. He had started advising me. I was tired of pitching, but he insisted that I go.
On a trip that lasted three hours in Jordan, I went and pitched to some US investors who were on a Geeks on a Plane tour. Dave McClure, the founder of 500 Startups, happened to be there. We had a long discussion trying to convince him to make his first investment in Egypt. Two months later, we were the first startup based in Egypt, and probably only the second in Africa, to join 500 Startups’ Silicon Valley accelerator.
Back home, O’Donnell and Tarek Fahim, one of Egypt’s earliest and now most prominent tech venture capitalists, joined as angel investors so I could afford the trip to Silicon Valley. I didn’t have cash to cover the plane ticket and accommodation in San Francisco.
When I got the first $50,000 ticket from 500 Startups in mid-2014, we paid back our loans and ended a four-year chapter of funding drought, bootstrapping and cash struggles. Read the full interview.
3. Leticia Osafo Addo
Leticia Osafo Addo is the managing director of Samba Foods, a Ghanaian indigenous food-processing company that focuses on ready-to-eat foods, condiments and seasonings which are made for the domestic and the export markets.
Samba Foods was the first company to commercialise the production and the distribution of shito, a traditional pepper used … in the coastal region of Ghana.
The most stressful challenge I encountered as an entrepreneur was when the company became indebted to a bank. The company, being the pioneer in the shito business, enjoyed high patronage, serving public and other institutions, including officers on peace-keeping operations around the world.
A major client, who had the bulk of our business, was unable to pay for products supplied for … [more than] two years, thereby throwing our cash flow projections into disarray. We … defaulted in servicing our loan facilities with a bank that supported us through our rapid-growth period.
Instead of discussing a reasonable repayment schedule, the bank decided to call for the money. No amount of negotiations yielded any positive response as it sought to redeem its money by seeking a court order to auction my private residence. This was a stressful moment for me and the family.
Together with the board of directors and experienced consultants, we came up with a strong strategic plan, sought capital injection from a venture capital company, restructured our operations, [and] increased our product portfolio and client base. [In addition, we] put internationally accepted food safety systems in place and got a contract from an international fast food chain to supply pepper in sachets to its restaurants, another novelty that changed the fortunes of our company.
We have since paid all our debt, expanded the company and are listed on the alternative market of the Ghana Stock Exchange. Read the full interview.
4. Brad Magrath
Brad Magrath is the co-founder and CEO of Zoona, a financial services company that offers money transfers and payment solutions. The company has operations in Zambia, Malawi and Mozambique as well as support offices in South Africa.
We started a business, disrupted the market, effectively created a whole new customer base and revenue opportunity and became the dominant market player and strongest consumer brand for a few years.
The challenge about proving something works is that then the bigger players are attracted in and can replicate, invest and take you on. We aggressively competed and maintained our leadership for a few years, but did not have deep enough pockets to win, and we were knocked off our perch with a bump – a big bump.
We had to totally re-invent ourselves and our business. We pivoted from a consumer business model to a B2B model. This required a massive change in culture, staff, cost, brand and a whole new way of doing business – including our previous competitors becoming our customers and suppliers. It was incredibly tough times that required humility, conviction, fortitude and resilience.
To pivot and come out the other side we had to focus on understanding and solving our new customers’ pain points, and then cutting all the legacy costs that did not support our new business. Pivots are tough but if you address the real issues and problems, and then communicate and commit to the change, it is a real win to come out the other side as a very different business, with new opportunities and challenges to address. Read the full interview.
5. Adetayo Bamiduro
Adetayo Bamiduro is the co-founder of MAX (Metro Africa Xpress), a Nigeria-based mobility platform that connects users to vetted professional motorcycle-taxi drivers via a mobile app.
At MAX, we strongly value mutual respect. As such, when we began this journey, we aimed to improve the dignity of work for motorcycle taxi drivers; it’s not exactly seen as a desirable job in Nigeria.
When we first launched our business, we had a large client for whom we provided last-mile delivery services. But, this customer harassed our drivers and really disrespected them; he repeatedly called them stupid. He’d accuse them of late deliveries, although the orders were put in too late for same-day fulfilment. It got to a point where many of our drivers were deeply demoralised.
This situation was tough for us because we really needed the revenue – we were still a very young business – and this client was responsible for almost 25% of our total revenue stream. We deliberated over what to do for two months.
Ultimately, we decided to stop working with this particular client out of our commitment to our drivers. Our drivers are more critical to our long-term success than one customer. While we lost that client, because of our growth strategy, we were able to offset the initial revenue loss and protect the dignity of our drivers. Read the full interview.
6. Fred Swaniker
Ghanaian entrepreneur Fred Swaniker is the founder of the African Leadership Group, which consists of: the African Leadership Academy (ALA); the African Leadership University (ALU); the African Leadership Network and the ALU School of Business.
Last year, we had a serious conflict in our organisation. When we started the ALU, from the beginning our plan was to do something disruptive, unconventional, innovative and large scale. We wanted to develop three million leaders in 6,000 days and become financially sustainable. Yet somehow a significant proportion of our team was misaligned with our vision.
They wanted to stay small, not expand to other countries, to do things the traditional way and did not agree with our plans of becoming financially sustainable.
We took a hard look at how this had happened and realised that at some point in our growth, we had hired people who had the skills we needed, but did not share the same personal values and beliefs as we did. This was causing misalignment. And the misalignment was slowing us down.
So we asked them to make a choice: join wholeheartedly or leave, and we offered people three months of pay and assistance in finding a job somewhere else. About 30 people left the organisation. As heartbreaking as this experience was, the stakes were simply too high.
I have found that achieving something difficult with a team that is 100% committed is hard. Achieving something difficult with a team of people who are not committed is impossible. In the end, it was better for all involved. The organisation is now moving faster and people who remained are happier, their personal beliefs and values are aligned with the organisation’s. Read the full interview.
7. Nicolas Pompigne-Mognard
Nicolas Pompigne-Mognard is the founder and the chairman of APO Group, a company that provides media relations consultancy and press release distribution services in Africa and in the Middle East.
In 2013, I had to fire our main salesperson. She was generating more than 60% of the turnover at the time, but, unfortunately, she wasn’t generating any growth. And she was even “forgetting” to send invoices to our clients. This was partly my fault. I had wrongly assessed the profiles and skills the company needed at the time, and I had made poor choices with the first three people I brought on board. I realise that now.
A few weeks later, in a completely unrelated turn of events, I learned that our three biggest clients, representing close to 35% of our total turnover, were not renewing their contracts because of budget constraints. They were happy with our services, but their public relations budgets were being cut in the coming year.
So, there I was with no head of sales and with 35% of my turnover gone. It was December and I remember Christmas being quite bad that year. I was worried. The problem is, when turnover is starting to take off, and the company is still small and fragile, you really have to make the right choices or the dream can be over in a flash.
Within three weeks, I had hired our brand-new director of business development. She was pregnant when I hired her, and we’d only had two telephone conversations. I’d never even met her. But she stayed with us for more than five years and did an amazing job at APO Group.
I have learned a lot of things from that experience. First of all, I found some strength from the idea that, if I could survive that, I could survive anything. Also, it taught me that, in a company, nobody is irreplaceable. And that if you are able to learn from your mistakes, you will always manage to improve.
In that specific case, I was hiring somebody much more suited for the job. Lastly, it taught me that panicking is never an option, but being able to identify and acknowledge a situation as a “crisis” is extremely important, as it allows you to reassess your priorities and focus your resources on the resolution of that crisis. Read the full interview.
8. Bethlehem Tilahun Alemu
Bethlehem Tilahun Alemu is the founder and MD of soleRebels (among other companies), a footwear entity established in 2004, which set out to reimagine the traditional Ethiopian “selate” and “barabasso” shoes. The soles of the shoes are made from recycled car tyres. Today, the company has stores all over the world, including in Ethiopia, Singapore, Switzerland and Taiwan.
This question comes up quite a bit and I always reflect and think [about] the same thing: business is about solving problems. Trying to identify the singular most difficult situation would be doing a disservice to this simple fact: if you are not continuously encountering tough situations as an entrepreneur, and solving them, then you are not really in business. Encountering obstacles and overcoming them is my day-to-day existence. Read the full interview.
Article originally published on www.howwemadeitinafrica.com