I wonder what, exactly, is my job title sometimes. My card says “Partner — East Africa” but that doesn’t say much.

Mike and I are working on our pitch for SBSVC. We don’t exactly need capital, but it’d make us move faster, further, and achieve profitability sooner.

I’ve also got a couple of early-stage companies– soon to be investees– that I’m working with, which has got me thinking, as I always do, about the market and landscape here in sub-Saharan Africa, most exist in London, New York, Asia, or Silicon Valley– they are just magnified here.

Venture capital
There are a lot of misconceptions around venture capital and angel investing. Most entrepreneurs go out looking for the largest possible cash flow at the lowest valuation, without considering what else the VC might bring to the table, i.e.

Experience
Contacts
Networks
Advice
Business
Modeling

are just a few of the things. Most VCs (the only ones I’d want investing in me) have experience as entrepreneurs and at running businesses. Most of what I see as the big failures in VC from the past– I lived & worked through the heart of the dot.com and the Web 2.0 bubbles– have been, broadly, the fault of having the wrong investors. Kozmo.com being the prime example– some guy with an Excel spreadsheet thought they should take this FMCG service company and sell Palm Pilots at a huge markup.

The VC should be the person who, once they’ve picked you as an investee, will do the right things to make the pie bigger. It doens’t matter so much if you give her huge equity slices; she should work to make the pie big enough so that all parties have more actual cash.

Partner
One of my current Enterprise Partners is a fascinating woman. She’s lived and worked all over the world, but is here in Uganda and has invested heavily in a fish farm. Fish farming is controversial worldwide, but here in Uganda the fish that are typically farmed are catfish and tilapia– two of the “OK” fish to farm (low resource usage, high tolerance for variable conditions, etc).

My partner is excited about the opportunity to work together on an equity basis, in partnership.

Mentor
Mike and I had originally been using the term “Venture Search” for our model, but it has a fairly specific meaning that is tangential to, rather than describing exactly, our business model.

I like the term “Mentor Capitalist”. We provide many of the benefits of a traditional VC, but in a more hands-on fashion. We provide network breadth while the VCs provide depth.

Building markets
The market for angel investing and venture capital has to spring from the fertile ground of entrepreneurship; entrepreneurs, however often need start-up capital. In some cases– in the cases where we’re trying to work– we can start tilling that entrepreneurial soil to attract interested investment capital and a new network of angel investors, setting up a virtuous cycle.

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Use who you are & what you’re good at in your teams

Teams are groups that are cohesive. In most of the work you’ll do in business school, in work, and in life will require the assistance and aid of others.

While I can build a financial model, there are others who can probably do it better, and then what I’m good at is talking through the items, finding bits that my financier may have missed, and discussing what an appropriate discount rate should be.

While I can write a detailed marketing strategy, I’m better at coming up with the broad strategy and leaving the details to those who are best at it.

Teams work well when they work together; almost no one works in isolation. Use your strengths and let your teammates shore up your weaknesses.

This series is all be tagged “Lessons learned” if you want to read all of them.

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African Branding
Kampala– and much of Africa– in incredibly brand-conscious. Entire buildings and building blocks are painted (often just for the cost of the paint and labour) in UTL blue, Warid red, Zain purple-pink (a particulalry hideous shade that makes me think of a little blood mixed with Pepto-Bismol– see below), and now Orange.

Bugolobi trading centre hurts your eyes as you pass

Signs and billboards are everywhere, clogging the streets (though often representing the only street signs) flooding brand awareness of Nissan, Orange, and the MTN sponsorship of the 2010 World Cup (how many Ugandans will be able to attend? Likely not many, but MTN is the sponsor).

Intriguingly, a stove manufacturer who has approached us for carbon financing is painting his stoves Zain purple, and is calling them Zain stoves. We have now arrived at tag-along branding.

Competing stove manufacturers– tag-along Zain stoves on the left.

African Marketing & distribution
The flip side of this is that Africa’s production capacity is actually pretty good: there is a lot of skilled and semi-skilled labour, engineering expertise, manufacturing skills. One of the biggest things that I see lacking is in marketing and distribution channels.

Entrepreneurs everywhere get marketing mixed up with advertising– but more so in Africa. People know they need to invest in marketing, but it ends up being copycat marketing– trying to flood the airwaves and print media with ads– all of which get lost.

The opportunity
If you can get marketing and distribution right (and almost no one is– certainly not the international mobile telcos) you will make a pile of money in Africa.

Some of the promising work that I’ve seen has been in microfranchising (i.e., the Avon model– in fact, Avon is doing incredibly well in South Africa).

At some level, Gordon Gekko is right: (some) greed is good. That’s why African Enterprise Partners is for-profit. What’s it going to make to make our partner enterprises’ excellent pro-poor products stand out from the crowd? To get people to invest in technologies that save money over the long term and have associated benefits? Leave thoughts. I’m excited to hear them.

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Figure out what you’re good at and be who you are.

In strategy courses, we talk a lot about sustainable competitive advantage-what it is that makes your company better than others at doing what it is that you do-in some cases, you may have companies that compete in markets but don’t directly compete against each other-Starbuck’s, for instance, doesn’t sell coffee, it sells an experience, the “third place” which is familiar and homelike, where you have music and comfortable seating, you can have a meeting, but you aren’t distracted by either home or work needs (except when your BlackBerry starts flashing and vibrating at you). This is why they haven’t made a competitive response to McDonald’s. People will choose one over the other, but McDonald’s isn’t going after Starbucks’ core business-the experience.

On the other hand, lots of people go to business school to give them new opportunities in their lives. One of my friends had worked extensively in technology (as had I), and we were looking for a change. We went to speak to our strategy lecturer about it, and he advised us that, strategically, if you were throwing away IT and tech skills in this market, you’d be unwise.

This caused us to look back at ourselves and really try to analyse what it was that we were good at.

I’d already been on my second career-I’d shifted from performing arts and nonprofit entrepreneurship to technology work in Silicon Valley-arguably one of the entrepreneurship centres of the world-certainly for IT companies. I turned down very good, very lucrative jobs building and running data centres, and I started thinking of myself as an entrepreneur rather than a technologist-defining myself my who I was rather than what I did.

Whereas most of my colleagues in IT had focused on a sector-biotech, say, or the Internet, I’d worked almost exclusively for small, growing companies in a wide range of fields-biotech, Internet services, advertising, security, chip design, theatre, event management, consulting, government services, transportation. Where my colleagues argued for clean, elegant design and tight, efficient code, I’d try to look at the big picture, to understand why it was that Marketing made seemingly unreasonable demands, why it was that the executive management would ignore profitable centres while focussing on money-losing businesses, and why Finance would drop critical line-items from our budgets. I certainly did make a lot of unreasonable arguments myself, but I ended up often being the person who made the connections between those groups.

My self-searching provided me with a list of things I was good at:

· Making connections

· Seeing the big picture

· Translation between groups (how you talk to engineers versus salespeople)

· Developing and mentoring

· Strategic direction, in product, marketing, sales, or overall.

· Choosing which details to focus on

All of which adds up to entrepreneur. So I shouldn’t have been too surprised when I was knocked back from the big private equity houses and consulting firms-while they’d have a use for someone like me, they couldn’t see it.

This series is all be tagged “Lessons learned” if you want to read all of them.

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You don’t get to make the rules; deal with it.

This one you hopefully learned in undergrad, but it bears some repeating. You take a top international business programme which requires several years’ experience to get in and you’re quite likely to have a lot of talented people who are used to having their way with things. These are (or have been) important people- important to someone, anyway.

Suddenly, these people are in strange bidding wars, having to jump through hoops and submit assignments and not getting any feedback on them and, in some cases, failing.

There were people who, through the complicated elective-choosing system, didn’t get to have lecturers or courses that they came to Oxford for. Some of the lesson here was to make better choices. Some of the lesson is that you can’t do everything. Some of it is to just pick yourself up off the floor and deal with it.

There’s an economic principle called Sunk Cost, the lesson of which is that, once something is in the past, you can’t get hung up on how much it cost-if the right decision is to move on and trash it, you trash it. You move forward. You look at the situation you’re in and move forward from there-not from before you became the King of Bad Decisions.

This series is all be tagged “Lessons learned” if you want to read all of them.

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You don’t get to know the rules; deal with it.

For most of my academic life, I had some idea of what the grading policy would be for my work-I always lost all the penmanship points, but got most of the rest of them. You could, of course, use this to game the system-you’d get to know your lecturers, what they liked or didn’t, and you knew what to focus on.

The Oxford system, like life, is much more complicated and difficult to navigate. To start with, we had to tread a fine line between business writing and academic writing. Secondly, your papers are all double-blind double-marked. You hand them in at the exams schools with only a number on them, and you receive them back, without comments, with only a mark on them. You had to read others’ papers and intuit what you may have done wrong. Third, you didn’t get to know who marked them, so you couldn’t ask. The lack of a grading scale meant that it was that much harder to deconstruct what you didn’t know.

Yes, it’s unfair. And frustrating. Welcome to life. It’s a little glib, but it’s also a bit of a dose of reality.

Just like you might go out and start a business or get a job and it’ll turn out wrong, you’ll fail, lose all your money, your grandma’s house, and whatever else, so it is with work.

On the flip side, you might end up with a great mark for something that you thought was terrible. Maybe you hit on some nice insight, or maybe you just got lucky. Sometimes overanalysis is worse than underanalysis. Sometimes you just manage to start Friendster and have a decent run on VC money while you figure out what to do with your life.

This series is all be tagged “Lessons learned” if you want to read all of them.

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The most important lessons are learned, not taught.

You can only be taught so much in life, but most of what’s important you’ll have to learn yourself.

A lot of people were frustrated in our core Financial Reporting course-the accountants were upset that the course was teaching that their science was all tricks, smoke, and mirrors. The poets were terrified that the final exam was a detailed review of the mechanics of accounting standards.

The lectures consisted, for the most part, of a Japanese and Italian man making jokes and examples about how the science of accounting is really a grey area, as the values of things change depending on the business operations.

The lessons learned were to think critically about everything-especially the hard numbers on a balance sheet. What is your inventory really worth, when it was purchased at different prices at different times? What does “goodwill” really refer to? Define revenue (you’d think that one would be easy). The other lesson learned was the bootstrapping-you had to learn all the mechanics of accounting yourself (there was an evening class for those with trouble), but Tomo wasn’t going to sit with you each week and go over adding and subtracting columns of figures-his work was on strategic accounting-what a manager needs to know about what his accountant is doing.

This series is all be tagged “Lessons learned” if you want to read all of them.

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What you learn at Oxford’s Business School

(The most important parts of which they don’t teach you)

In my final set of posts about Oxford, I take a look back, six months out, and reflect on what I learned at Oxford.

I suspect that some of this applies to all business schools, though much of it will certainly only apply to Oxford. I feel very fortunate to have the gall to apply, raw intellect to get in, persistence to succeed, and perhaps the wisdom to let a little of what I’ve learned sink in, not to mention a great heap of humility in the face of so many talented and fascinating classmates.

Business school - like any school - is an experience, not a lesson or a set of skills. If you want to learn the skills of an MBA, you can do it on your own, with books. I’d start with a good micro- and macroeconomics primer, an accounting book, the McKinsey book on valuation, The Seven Habits of Highly Successful People, and then start working through the Personal MBA.You can teach yourself strategy, operations management, valuation, management, statistics, economics, and marketing all on your own. What you won’t get out of that is the experience of others’ experiences, the network, and the time off/huge student loans. It’s up to you.

Some of what you’ll have the opportunity to learn at Oxford is here. This is beyond all the cool guest lecturers, the Oxford Union, the speakers, conferences, and amazing professors you would encounter there.

This series is all be tagged “Lessons learned” if you want to read all of them.

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As an entrepreneur working here and looking for projects to invest in, I talk to a lot of people, and I talk over my business model with a lot of people.

I often (as often as almost always) get advice, along the lines of

You just be careful, you put your money where no one can touch it, and you get that money back. People will steal it. Don’t trust anyone. Everyone is out to get you. They all see you, the rich Mzungu, and they just want to work for you and eat up all your money.

This can, as you might imagine, become disheartening.

The best jobs for graduates
If you’re a top student from here, you might be lucky enough to go on to MIT or Harvard, or you might go to either KIU or Makerere University. And when you graduate, what do you do? What are your preferred options?

1. Go work outside of the country, preferably outside of Africa: This is usually the top option, and it’s understandable– it’s exciting to move away, to a bigger, richer, more exciting place. I did it, thrice, now.
2. Go work for the government: Secure jobs are in the government, and the government is full of interesting positions. In some cases, this may be because goverment workers amass powerful contacts, which can benefit in the form of power or cash. In other cases, this comes from a desire to change the situation from within– to work on anticorruption, for instance.
3. Go work for an NGO: I have no problems with NGOs, but it seems odd to me that this would be a top job, except for the security and stability. NGOs protect their own, and understand (and often index salaries for) inflation. Plus, the benefits are great. You get to meet people from other countries, and you may get to help out people in your own company.
4. Go work for one of the big companies: Big companies, stable jobs, decent benefits. No real surprises here.

But that, pretty much, is it. Almost no one starts a business early on. The best and brightest leave.

What is it that drives some people to return to their communities, start a business, and create jobs? What makes a student is inspired by a teacher and becomes a teacher? What is it that drives a bright young student to forego lucrative opportunities to work as a community organiser?

And what keeps that from happening?

Problems don’t get fixed
One of my biggest challenges here is in understanding expectations.

Lots of things go wrong, all the time. One of my South African friends reminds me that “Africa works, just not as fast or as reliably”, and he’s right.

But there’s another issue– that because of this working this way for such a long time, it’s become the norm.

People turn up late for meetings regularly– as much as an hour late. And they don’t call to let you know, it’s such a common problem. (There are lots of people I work with who don’t accept this and are relentlessly punctual. I thank them profusely).

There was a leak in the office the other day. A few guys moved the photocopier, but took no pains to either shut off the water or to call anyone to fix it– nor, even, mentioning it to the boss when he came in.

I get monthly reports from entrepreneurs and there are numbers off, and, each month, I have to go sit down with my guys and work with them to identify where the problem came in.

There are lots more of these problems, and they don’t get due care or attention.

Defeatism
I believe that these are all symptoms of a defeatist attitude. Why start a business locally when it’s so hard? Why re-invest in your community? Fifty years and trillions of dollars in aid hasn’t made a huge difference (and you can see the effects of this aid all over– including in cultures of dependency). Get out while the getting is good.

Sure, you’ll miss your home, but why bother fixing it? The problem is too big for one man to change it.

Relentless Undefeatism
This defeatist attitude must change. This may be the biggest thing holding Africa back from significant development.

It will take committment, day by day, to change this. It will take huge effort by many people. Some of them will rise up and be Mandelas or Gandhis, while many will be the unnammed faces in the crowds. Whether you’re one or the other will be a matter of chance.

It will take boots on the ground, working hard, getting muddy, and facing the issues day by day.

It will take concerted effort by the Cheetahs to demand receipts for “stamp fees” from hippos, slowly but surely stamping out corruption and bribes.

It will take development and efficiencies in the tax code, so that police are paid enough that they don’t need bribes to survive and feed their families.

It will take investment, and not just capital, but labour investment by the best and brightest graduates, to come in and build pride– to develop Africa’s Richard Bransons and Henry Fords.

It will take pride, building a culture that looks for goods made in Africa rather than the USA, UK, or China.

It will take the gall to step up and say “Yeah, we can do that”, and to figure out how to do it, or to ask for aid to find out.

It will take determination to see something wrong and fix it.

It will take an end to hopelessness, and good examples.

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What’s an MBA, anyway?
The world, it seems, is upset and unhappy with MBAs, and for good reason. We’ve just retired our first MBA President to decidedly mixed reviews. It’s easy to forget that George Bush did lots of good things– like seriously increasing aid to Africa. Bush also did lots of things that I consider bad– namely increasing and consolidating executive power, and starting a war with, at best, shaky evidence.

When I decided to get my MBA, I got a lot of push back from friends– MBA has, in some minds, gone from a management degree to a financial degree. Indeed, the “classic MBA” profile would read something like:

Undergrad in economics, business, or finance
2-3 years in an investment bank or consulting firm
A desire to work for a “better” investment bank or consulting firm.
26-27 years old.

The original MBA
When the degree was conceived, it was as a degree in general management, to develop management science and to create a cadre of managers.

As much as Dilbert’s pointy haired boss and the FedEx “Even an MBA” commercial are fun to laugh at and silly (and all too often close to reality– see GM’s infamous “Kwality Kat” initiative), many (most) MBAs do, actually, do things that provide value in companies. The thing is, they’re not Jeff Skilling, they’re not cruelly laying people off, they’re the ones on the front lines each day, working to make companies efficient and profitable, creating sustainable businesses that employ people.

MBAs study management science, which synthesises a lot of areas, from social sciences (day to day application of economic theory), to hard sciences like statistics, and apply those skills to the problems of making people work together (organisational behaviour), apply value propositions to the goods or services they sell (marketing) or to figure out what business the company is really in (strategy).

The MBA Banker
MBAs are heavily hired by banks and investment firms, and for good reason. They’ve proved that they’re willing to take a risk and have proven that they can survive academically as well as in the real world.

They’ve learned to take a situation, break it down, and offer a complete analysis of the situation and the paths and risks to conclusion.

And they know how to put values on things.

Valuation
is an art which relies heavily on science. Just as I was heading to business school, I heard that the Absolut brand sold for $2bn, and one of my colleagues (Wharton, ‘09) and I had a discussion about how on earth you can come up with something like a valuation for a company.

Ultimately, you’re taking a bet. Coming up with a range of values is fairly easy, but you can’t (usually) purchase something with a range of values– you have to put a pile of hard currency in someone’s hands.

The same thing with an equity or debt investment. The same thing with a car, or boat or house.

The science gives you the language to start having a converstaion of the value of something. If you pay $2bn for the Absolut brand, you’re telling the world that you think you can make more (or at least) than $2bn of todays dollars on it in the future, somehow.

The Credit Crisis and you
Where the heck are you going with this, Glen? Pretty much, to the credit crisis and you. And there’s a later point, so bear with me.

Heres the thing. The availability of cheap credit had staggering impact across huge numbers of lives– and if you’re reading this, you with 99.99% certainty benefited from it.

You got cheaper car loans, home loans, or cheaper student loans (If you’re from the US, remember the “historically low consolidation time” around 2001? That was due to structured credit– the same thing that is close to the middle of the credit crisis). You got cheaper computers because computer companies could get debt cheaper, transports companies could get access to cheap capital to buy more cargo ships and you could fill up at Bed Bath and Beyond or Whole Foods with excellent wine or cheap towels.

Much of this cheap credit came from developing countries holding on to more foreign currency reserves after the Asian credit crisis, investing it in safe developed countries. Much of that investment helped out their economies as G8 countries went on a credit-fueled spending spree.

And now?
Yes, and now. our house of cards got too big, and everyone’s afraid. We’re remembering that diversification of economies is a good thing, and that Britain can’t just export ideas and financial services (someone will steal the ideas and handle money more cheaply). Britain must still make things of value. America can’t be a complete knowledge economy.

At the same time, globalisation is here to stay. Toyota makes more cars in the USA than GM does (even before GM’s latest woes). Using principles like comparative advantage to figure out who should make which bits and making strong, simple, understandable trade agreements to level the playing field between larger and smaller players should become the order of the day.

The role of MBAs
We have not seen the last of the Enron days, nor the abuses of power that created them. We have not seen the end of multimillion dollar exectutive pay packages or office redecorations. These are necessary evils.

Where the MBAs will be seen helping out, though, is in identifying opportunities and choosing the best ones. In picking which customers to focus on and which ones are to expensive to keep. In redeploying workforces to be more effiicent.

Yes, this will mean redundancies, but what’s better– 1,000 redundancies or 10,000 people losing their jobs when the companies go bust?

The role of MBAs in development
The world of development is shifting. People want to see ROIs and the effect of their money. People want to know that they really are making a difference, and not just on the warm-fuzzy visits when the best aid projects are toured annually by big-ticket donors flying in business class.

People want more than Sally Struthers’ pictures of healthy kids, they want a whole new generation of healthy kids. They want to see whole systems analysis of the problems on the ground and paths out of poverty.

Donors (And social investors) want more.

Entrepreneurs on the ground want more as well. I talked to two guys the other day in Mukono District who were each hauling about 125kg of charcoal on their bicycles. They’d cycled 16km out to pick it up and were walking it back to town, where they’d sell it. I asked them how often they did it (about every 2 days) and how much they’d clear from it (about 5,000/= or $2.50).

I asked them if it was worth their time, and their answer was “no, but we have to do something”.

This, on the small scale, is the same problem I see at every scale, all over Africa. Entrepreneurs work hard– 10+ hours a day, 6 days a week, and are so desparate for customers that they have trouble covering their costs.

I am working with a company here that does $2mm of business a year and they can’t cover their costs. My suspicion is that they need someone to do some market and channel analysis and help them identify the customers they should focus on– but they don’t have the skills.

I have another company that makes a product that aids digesion in cows, producing 15%-40% increases in milk and meat production while reducing methane production (one of the most significant and long-lasting greenhouse gases), and they need a hand in developing promotion and pricing strategies, as well as streamlining their operations and preparing themselves for growth.

Africa needs MBAs
Along with the rest of the world, developing and developed, Africa needs MBAs to build or rebuild businesses.

Warren Buffet warned us for the last ten years to be cautious, and now he’s being greedy. This is the time when companies can take root and flourish or wither in obscurity, remembered only by people who liked their services (Kozmo, anyone?). This is the time when the next generation of entrepreneurs will prove themselves.

The raw talent is here, the drive for success exists, the education is here (though not nearly widespread enough). There are companies to build and a generation begging to be entrepreneurs. Invest.

MBAs can help this Cheetah generation come up and put an end to Africa’s difficult legacy, to the distortions of bad economic policies, colonialism, and too-rapid shifts. More and more MBAs and business students want to do well by doing good. We could use your hands.

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