Numbers don’t lie in startups

They say numbers don’t lie. Well, that could be some how true at least in startups.

Before you embark on your world changing brand new business venture.

Of course you have to first prove that, indeed customers exist that desperately need a new solution. By doing market validation.

After that, one more thing you should never ignore is checking numbers.

which numbers?

number of Sales, price, customer acquisition cost, Lifetime value, customer retention rate and others.

if you project those numbers well, they can tell you whether your business model make sens or not? numbers will tell you if your going to succeed or fail.

if you don’t? your new business will run out of fuel mid way before reaching your destination.

Today I will talk about number one. will add more tomorrow.

#1. You MUST know. How many sales do you need to make in order to meet your operational cost and How long will it take you to reach that milestone. you must know this right at the beginning.

Knowing that number will help you determine a lot of things, including price, revenue model, what to do and not to, which survival tactics should you deploy, How much seed money is realistically required, what to spend on and not, the list is long.

The most important milestone that matter most is to survive until you reach that magic moment of self sustaining. Being able to meet your monthly operational cost.

most startup fail because they cant reach that moment.

You deserve that leader

A society gets the exact leader it deserves at the right time in the right doze.

That statement holds heavenly truth.

Societies evolve from one stage to another and each stage come with the leader it deserves.

Then it makes sense if we focus more on fundamental things that can cause society change rather than leaders.

It’s like trying to find angel Gabriel in Hell.

This is the part where I love entrepreneurs. These people change societies. Entrepreneurs solve problems faced by societies. They make the world a better place . They invent things that fundamentally turn around societies

Imagine the word without internet, mobile phones, computers, etc.. I can also add change caused by social media, mobile money, etc

That’s why I choose to be an Entrepreneur.

You actually need money to start a startup

Let me remind you this… You actually need money to build a startup.

It’s not secrete anymore. For you to build a startup that turns out to be a company that can attract investment, solve a major problem and serves very many people. You need money. In fact the number one rule is to NEVER run out of money before reaching a stage where your business can meet operational cost.

Right at the beginning, you must have a clear plan and strategy on how to get money.

What does it mean?

You need to convince someone to give you money. Someone to invest in your dreams with no business on ground to point a finger at.

To easily pull this off. You need to dream BIG. Have this gigantic idea that is going after a huge huge market. Even if you acquire only 0.1% of that market, the owner of the money has 100X returns on investment. Example if he risks his 10,000. He should be able to get 1,000,000 if you pull it off. Paint clear picture of what he or her will miss if he doesn’t be part of it. Literally scare the heck out of him or her.

Don’t forget to be armed with some form of market validation proof and lastly present yourself as the best person or team in the world to make the idea happen. Showcase knowledge, passion, trust and technical abilities to execute the idea. Remember that person is investing in you. Well, there is no business.

Trust me you will have that check signed. It has worked for me and others too.

Burn bridges that can get you from the “front-line”

I have come to realize that putting yourself in a situation that requires you to not let people down can inspire you to keep going. Forget what people tell you, trust me as an entrepreneur each day your faced with strong reasons why you should give up. Your own personal satisfaction isn’t enough fuel to keep you moving.

For example.

Knowing that, there are people out there waiting to read what I write gets me typing to publish an article. The feedback I get push me to keep going and going. I don’t even feel shy about my wrong grammar and typos.

Countless times I get tempted to apply for a job to be in a comfortable zone of monthly pay check. But, I go. What a heck the whole world know I am an entrepreneur running businesses. Solutions to change the world and create jobs how will I do that when I am employed by someone else? That keeps me focused .

Knowing that I have people on my team who believe in my mission and willing to bet their career on me and work on my business idea keeps me awake.

The fact that, someone (investor) has put money in my business idea trusting in the mission I am on. Gets me working like crazy.

Knowing that people look up to me. They believe in me, they know I can do it. Gives me energy to work like a horse fearing to let them down.

When I see my family say “Ronald your going to be successful”. Is enough fuel to get me going.

Put yourself out there burn all bridges that can get you out of the front-line.

I am the co-founder and CEO of visipo

Ugandan entrepreneurs. Be crazy.

Yesterday my friend Muwonge Julius the CEO of Yohomu invited me to  attend the first ever “Activation Week” an event where entrepreneurs meet to learn how to start or scale their businesses organized by U.S. Embassy Kampala , and FK Youth Mentoring Network.

I listened tentatively as different young visionary enterprenuers pitch their businesses and ideas. Very impressive.

I was equally hugely inspired by the ambissious and  confident  Esther. Who was the guest speaker. Her goal is to retire at the age of 35. I actually don’t know when I should retire. I love working hahaha. She challenged me.

However, I think we are not crazy enough. We Ugandan entrepreneurs are shying away from tackling big problems, most of the ideas pitched were just nice to have and going after a small market. If we want to change the world. If we want to attract serious investors. We should go after big problems. You need to have an idea or building a solution that makes people think your crazy to pull it off.

Secondly. Every entrepreneur who pitched. I found it difficult to answer these questions. What stage is your business, what problem are you solving, who is the customer?. What do you really need. What milestone have you achieved and what are those milestones you want to achieve ? Why are you the person to make the idea succeed and many others.

Thirdly, I think there is a huge confusion between starting a small business and starting a startup.

Startup is a small group of people working together to create a solution that will solve a given  problem to achieve a sustainable and scalable business model.

Example. Facebook started as a startup by small group of people headed by Mark Zuckerberg but martured to a company now.

Chain restaurant Cafe Javas is not a startup but Jumia Food is a startup .

When starting a business as a startup many things are not known. Expect the problem.

Your job is to find answers.

Example. We know 1000 people in location X have problem Y and we are building or producing solution Z. To make money in the following ways.

And this is stage where all startups fail. Not finding answers.

So, at what stage should you count your startup a  success ?

When you know. X number of people use your solution and if you remove it from the market 50% of those will be very angry.

Example. If mobile money  is removed from the market. People will be angry and they can strike. What about if WhatsApp is removed?

That is startup success.

I am the co-founder of visipo  (we enable visitors arrange a tour in minutes and in four steps while in Uganda directly with hosts or guides)

Factors that will drive Uganda’s economic growth.

I was a panelist at the conference of Young Entrepreneurs. Themed “factors that will drive Uganda’s economic growth and development in 21 century”

We had a fantastic discussion and so many valuable factors were discussed.

However I would like to tell you four most important factors that I discussed even though, I talked about many but I believe these four will be a game changer

  1. The growth of entrepreneurs.

The world is currently churning out consumers. Almost everyone is desperately looking to consume something out of school. They need jobs, food, housing, clothing you can go on and on.

Unfortunately there are very few people producing them and these are entrepreneurs. We are faced with an insane ratio of producers to consumers.

Entrepreneurs solve problems, they make the world better. They build businesses that pay reasonable taxes to government. They open opportunities. They produce what consumers take.

The current situation of no jobs, no things to consume coupled with many problems to fix or broken traditional business models will push people to be entrepreneurs. I am expecting the raise of many in few years to come.

  1. Technology.

Africa has 1.23 Billion people and 992 Million of those are using mobile phones. Which means the market has moved and it’s on mobile. It is online. The number one rule of any business is to move where customers are. Mobile is just starting to rule.

The real true factor that helped Microsoft, google, Amazon and etc to be giants in the world is because, every person or home in those countries had a computer connected to internet.

Now, Ugandans/Africans have internet connected computers in their pockets. Currently whoever master the art of offering valuable solution through the mobile will take the day it doesn’t matter who is doing it. Do you have any idea the person behind WhatsApp? In fact you don’t need to know. Whether a school dropout or an animal who cares.

I am expecting more tech businesses raising from Africa and more opportunities opened. Mobile money is just a tip of the iceberg.

  1. Startups.

a startup is a business built to find a new business model and to grow very fast. Startups are replacing small business and this is good news to the world. Because startups are easy to start and to scale too. we are going to witness many scenarios where one or two people teaming up to disrupt a traditional business model. Startups are the in things for young entrepreneurs and employees.

startups open huge opportunities and can scale to the rest of the world easily. For example we are building a tourism startup called visipo (an app to enable visitors arrange a tour in minute and in four steps directly with hosts/guides in Uganda) but we are going to scale to the rest of African countries without putting there a foot.

I predict to raise of many venture backed startups growing rapidly to giant companies.

  1. The ability too nature leaders.

Successfully Businesses are built by people with specific set of abilities. People who can Identify a need, capture value and build a business around it. We have been witness very many businesses dying or are clinically dead those doors still open. Businesses that can’t create jobs neither pay taxes. We this huge access of information and the ability of young people to learn fast, will enable very many good founders coming up.

Equally political leaders. we have witness leaders create very bad business environments where starting a business is suicide. But now each passing day our generation is criticizing policies and bad governance, our generation is pushing for better policies. We expect more good policies to enable business growth.

I predict more better and refined business leaders to build sustainable businesses and Good policies.

Simple hack to come up with your next startup idea.

Welcome to new year 2017. The year you are supposed to solve one problem faced by many people and create business around it.

The year of creating your own employment and for other Ugandans.

In my previous posts we looked at where to derive business ideas and indicators of a good business idea. (check my blog www.ronymestel.wordpress.com if you missed them)

Today I will give you a simple “hack” to come up with a winning business idea.

1. Ask yourself. What painful problems do I have today? what are those things that I straggle to get and I need them frequently? are there things that make me miserable? list them down the solution.

Example: I find it a nightmare to get wide deep statistical data about things in Uganda. so i would start working on a website or tool to give statistical data.

2. Ask yourself what is broken in the world? is it painful to use the current service or product ? do you think there are doing it wrong? list down the better solution

Example: I find most online news websites in Uganda very wanting there doing it wrong. so I could start a business streamlining online news.

3.Ask yourself. In these years to come, say 10 years. How will the world be doing things? what will be trending? where is this particular industry heading to. what is going to be the next big thing?. list down next solution.

Example: I know the next big thing will be Virtual reality people will stop texting, phone calls and meet in virtual reality (VR). This will turn around every industry. so I would start building something to take Queen Elizabeth National park to world in VR

By now you should be with a long list of your next business idea.