I realized I didn't want to build and grow a business, I just wanted enough income to live comfortably

I love dance and music.  My idea was to start a performance school for teenagers and then franchise it in Lagos. I rented the space and started advertising on social media. I was surprised by the reaction; within a couple weeks, I had three full classes.

The economics meant that each full class generated about $3000. So if I have 10-12 classes I would be able to live very well and I would be working less than 25 hours a week. I could use the rest of my time to write songs.

My uncle offered to lend me $25K to open more studios. I thought long and hard about it. I realized that I didn’t really want to build and grow a business. What I wanted was income that would allow me to do the things I loved. My parents were upset. They called it a hobby and not a job. In the end, I was very happy with a hobby. I didn’t have the passion or will to start a business that would take over my life.

If my business fails, it will reflect badly on my family

In America, the fear of failure for startups exists, but it’s recognized that businesses fail. Some actually see it as a badge of courage or learning experience. The same isn’t true in my home country.

If I fail then it reflects badly on my family. My father is especially concerned and keeps telling me to find a proper job.

We made so many changes to the plan it confused everyone, including ourselves and our strongest supporters

We wrote our business plan for the seed round from friends and family. We sent it out to five people for feedback. We received some great feedback and modified the plan. We didn’t change much of the strategy but we made a lot of changes to the financial model.

We revised the plan and sent it to three more people for review. We got more input and didn’t know what to do when the changes suggested contradicted one another. We ended up using changes and ideas from the people we thought would invest in us. We went through this process four times and ended with a business plan, which differed from the original in many important ways.

The round was schedule to close at the end of the month so we contacted everyone we thought would be interested in investing. A number of people who had reviewed the plan along the way asked for the latest up date. They all responded that the plan didn’t make much sense anymore and they wouldn’t invest. One person asked if it was our plan or the seed investors.

We weren’t able to raise the seed round from our friends and family. We ended up alienating many of the people who were our strongest supporters. We had confused everyone including ourselves.

Business is for real men

This is my company and my money and I will do what I want. I don’t need Board members and investors telling me what to do. If they don’t like what I’m doing they can leave. I don’t believe in democracy and voting in business. It slows things down and causes confusion. 

The same applies to anyone who works for me. My staff do what they’re told. They can’t question or challenge me. I know what’s best. I got us to where we are. Working for me is simple. Get the work done on time and under budget. I pay better than other companies if my employees perform well. If they don’t do it right, they get fired.

I don’t believe in training and all that soft development stuff. Business is for real men. It’s war.

What should we do with a batch that didn't pass quality control?

One of our larger customers rejected the latest delivery from us. They said the labels weren’t fixed properly and when they tested a bottle, it didn’t meet their standards. They have a strong quality control system, but this is the first time they rejected our product.

It was a large order and we aren’t sure what to do with it now that the customer rejected it. One team member said we should sell in the market because the labels were wrong. Another questioned if it’s ethical to sell product that failed quality control. A third member said we should export it to another country. No one suggested that we destroy it!

I said we needed to learn how this happened and destroy the batch. We then had a long debate about our ethical responsibility. The fact we had to debate this was a concern to me. Finally I said, “We are an ethical company. There should be no question of reselling this batch. This isn’t who we are.”

We can't find an easy url to match our company name

What should we call our business? We had agreed on Beltway since we were selling customs belts from around the world. When tried to register beltway.com, we found it was already taken by a company with an unrelated name.

Other urls such as The-Belt-Way.com were available but nobody liked them. When we contacted the site owner for beltway.com, they wanted $100K for it.

Do we change the name of the business because we can’t get an obvious url for it? Should be choose the domain name first? Do we have to have “.com” ending?

The employee incentive program I set up backfired for the business

I know metrics are crucial to measuring and running a business. I got some books on entrepreneurship and business and found a set of common metrics startups and business used to measure their performance. I chose eight and added some more to capture a deeper understanding of particular aspects of my business. I then read about linking people’s performance to the metrics and using this to set targets for individual bonuses.

When I chose metrics, I didn’t pay any attention to their interrelationships. I quickly learned I had made a mistake by ignoring these. One of the key metrics was a 10% increase in new customers. Another was a 10% reduction in the investment in existing customers. I increased staff bonuses for each new customer they got. At the end of the first quarter we saw a 35% increase in new business but we lost 5% of our existing customers and only 15% of existing customers used our services more than once.

At the end of the next quarter the we saw another large increase in new consumers but a even bigger churn for existing customers and less than 10% using our services more than once. I brought this to the team and they saw no problems, they were following the metrics-based incentive program and happy with their bonuses.

The MBA team consulting for us had a different agenda than ours

We felt lucky to have the help from an American business school. MBA students were scheduled to come see us in June. There was a lot of excitement around their arrival. They would stay for six weeks and work on key projects.

When they got here, for six weeks there was a ton of activity but none of it was really focused on the day-to-day running of the business. The CEO was always with the students, so we didn’t have much time with him during their stay. Priorities weren’t clear and critical decisions were postponed.

After three weeks, the students prepared an Interim Report and gave a presentation with a series of recommendations. From the first slide of their PowerPoint, my stomach started to knot up. Their recommendations were so sophisticated and conceptual that they were almost irrelevant to our company. Some failed to recognize the culture in which we operated and the way business was done here. Some relating to government engagement were simply naïve.

Right after the presentation I told the CEO and we needed to get control of their work and refocus it. At first he didn’t want to listen but then I other team members joined me so he had to act.

The first issue he wanted to address was how to manage the professor who was sponsoring the visit. He was the CEO’s informal mentor. He wanted the visit to support some research he was doing. We quickly realized there were conflicting agendas.

It seemed like an advisor wanted to take over the business

Andrew has always been my advisor and friend. He had a long career in business and retired three years ago. He seemed to enjoy helping us and always had good advice. He was on the board of several companies and also travelled a lot. But, one day he said he would like to be more involved in the business. He had some free time and wanted to help us.

Andrew started coming into the office three days a week. He spent a lot of time to talking to everyone and began to get involved in day-to-day decision-making. He wanted a desk in the office. He had business cards printed showing him as an Advisor to our business.

One day Andrew sat down and said he wanted to join the Board. What he said that day and the way that he said it scared me. He seemed to me he wanted to run the business, to take it over.

I talked to other people in the team and they said Andrew was questioning my ability to run the business. He was inserting himself in the day-to-day operations. Everyone said they felt uncomfortable around him. Some said he was just bored and wanted to get back into the action. Rather that offering Andrew a Board seat, I asked him not to come into the company any more. We appreciated his contribution but we were growing up. Andrew was shocked and very angry. He walked out the door and I never saw him again.

Our Delaware registration makes us liable for far more even though we have not US operations at this time

Though my business was based in in Kenya, we had registered a Delaware C corporation in the US. Our registered address was our lawyer’s address. One day, the lawyer contacted me and told me two things: I hadn’t paid the Delaware franchise tax for two years so in addition to fines, the company would be closed; and the freight forwarder we used was being investigated under the Foreign Corruption Act, our company was one of the accounts being investigated.

I was shocked. We didn’t have any income in the US and the demands from Delaware were two years old. How could I be liable? This was the first I was hearing of them. Second, it’s almost impossible to get things done in Kenya without minor bribes; I’m not sure how anyone does any business without some infringement. Could they demand my records in Kenya? If I didn’t have the US company, would any of this have happened? Our lawyers set everything up and received all correspondence – are they liable?