How Great Entrepreneurs Think

February 10, 2011 by Leave a Comment

“I always live by the motto of ‘Ready, fire, aim.’ I think if you spend too much time doing ‘Ready, aim, aim, aim,’ you’re never going to see all the good things that would happen if you actually started doing it. I think business plans are interesting, but they have no real meaning, because you can’t put in all the positive things that will occur…If you know intrinsically that this is possible, you just have to find out how to make it possible, which you can’t do ahead of time.” – advice from an expert entrepreneur

What distinguishes great entrepreneurs? Click here to read about an academic study whose goal was to get inside the mind of great entrepreneurs and determine how they think.

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When Your Business Fails, Repeatedly

October 22, 2010 by Leave a Comment

I was reading a very, very interesting article on Hacker News on what to do when your new business just fails, and fails, and fails again. The initiator of the article is an entrepreneur whose products have not fared well. Below is a select few responses that he got. Business wisdom:

You seem to have been terribly misled. Only very rarely do products sell themselves. 99% of the time, the product is largely incidental to the sales process. Your idea doesn’t matter one jot, what matters is how well you can connect to customers and really sell to them.

Let me tell you about a fine English gentleman by the name of Joe Ades, now sadly no longer with us. Joe wore Savile Row suits and lived in a three-bedroomed apartment on Park Avenue. He spent most nights at the Café Pierre with his wife, sharing a bottle of his usual – Veuve Clicquot champagne. You might assume that Joe was a banker or an executive, but in fact Joe sold potato peelers on the street for $5 each, four for $20.

I urge you, I implore you, I beg you, stop what you’re doing and watch Joe in action:

That is what business looks like. Sometimes, once in a million, you luck upon a product so amazing the world beats a path to your door. For most of us, the best we can hope for is to be some chump with a thousand boxes of vegetable peelers. Anybody can sit out on the street with a box of peelers, but Joe sold them. Joe made his peelers sing, he made them seem like magic. He took a humble piece of stamped metal and created theatre. He did something so simple and strange and wonderful that people would buy a fistful of his peelers, just so they could tell their friends about this little Englishman they saw in Union Square.

Look at the Fortune 500, tell me what you see. I see grocery stores, drugstores, oil companies, banks, a funny little concern that sells sugar water. I see a whole lot of hard work and very few great ideas.

Forget about striking it big with a great idea, it’s just as childish and naïve as imagining that the tape you’re recording in your garage is going to make you a rockstar. Get out there and talk to customers. Find out what they need, what annoys them, what excites them. Build the roughest, ugliest piece of crap that you can possibly call a product. If you’re not ashamed of it, you’ve spent too long on it. Try and sell it. Some people will say “I’m not buying that piece of crap, it doesn’t even do X”. If X isn’t stupid, implement X. Some people, bizarrely, will say “yes, I will buy your piece of crap”. It is then and only then that you are actually developing a product. Until you’ve got a customer, it’s just an expensive hobby. Paying customer number one is what makes it a product.

“Honestly, there are 2 types of folks who make it: the lucky ones, and the persistent ones. Its hard as hell (and heck I haven’t beaten it yet) but you have to ignore the burnout and be one of the persistent ones”

“Why are you paying so much attention to your “launch day”? It’s an entrepreneurial myth that there is a mighty “launch” that sets the tone of your business. When was Twitter “launched”? When was Carbonmade “launched”? When was Balsamiq “launched”? Or SquareSpace, MailChimp, or Fog Creek? Sure, they “launched”, but who cared?

You are building a business. It does not spring from your forehead like Athena, or get pooped out of your pet Nibbler like Dark Matter on Futurama. Listen to what everyone else here has to say. Sure, pick something with favorable long-tail SEO dynamics. Sure, pick something with a viral loop. Sure, build yourself a tribe.

But then, for god’s sake, pick something you can stick with, nurture, protect, and grow over the long run. That thing you don’t have, that keep calling “a fucking great idea”? Most of us call it “a winning lottery ticket”. Stop thinking about playing the lottery. Get back to work.”

“Hang in there man.

What’s touched upon in various ways in all the comments is that “PR” and “Media Coverage” is not the end all be all. In fact the successfully software startups I know STILL email individual potential customers on a daily basis.

I think one of the great myths of the internet is that you should just create a product, throw it up on the internet with some SEO and AdWords and the customers will come. Sure it might work for a few people, but by and large you are still growing a business. And you often grow a business one person at a time, hopefully later you can learn to scale sales.

Often what is missing from people’s MVP’s and business plans is how are you going to very specifically market to your target customers, and what the cost of customer acquisition is. If you can’t identify a way to find your target customer, you’re going to have a problem. Again, I don’t think general SEO and SEM is going to work.

Don’t give up on your idea, start emailing people. 50, 100 people a day. Convert them one at a time. If your business idea is not specifically just some sexy piece of technology, direct mail may work too (if you don’t also have to educate people on why they need your product.)

Journalist want to write about what’s hot, not about what is a potentially decent idea in a decent market. They want to talk about iphones, ipads, and facebook, and the latest jargon.

Anyways, start finding your target customers and email them. Don’t worry about email campaign tools and crazy stuff, just starting email or calling them one at a time. Building a web based software business doesn’t mean you can just skip sales.”

I would say this is some of the best advice that can be given to new entrepreneurs. You can read the rest of the article here.

Filed Under: Internet Culture, Small Business Tagged With: , ,

How To Operate Your Business

October 19, 2010 by Leave a Comment

Many business owners are very focused on their business and its profitability, but most of the time when failures happen, they begin to wonder what they did wrong. They cannot figure what it is, especially if they have the impression they did every possible thing to succeed.

The explanation is simple and obvious. It is called planning, a process on which every business should be based. Lazy business owners simply forget to sit down and make a plan for at least a week in which they should write all the steps to be taken in their business development.

Here are some suggestions to be taken into consideration if you want to plan your business efficiently.

First, if you have an idea to grow your business, do not hurry to put it into practice as it is. The chances to fail are quite big. So, write down your idea and try to change it into a SMART goal. If you have several ideas, it helps to take a dashboard for each of them.

Think at an objective that is achievable on a short term because it is easier to accomplish. Establish all the steps you have to make in order to achieve it. If there too many parts to take into consideration, break the large tasks into smaller ones and set clear tine frames.

Pay attention to the information seeking part – it is better to delegate and request your employees to look for valuable information such as: customers, suppliers, competitors. You may also consult experts for technical advice.

It is also very important to do some monitoring. Once you get a feedback, revise your plan and adapt it to the new situations. This is the right way to performance.

Another advice is to do some assessing before setting a specific goal to see from the beginning if you have the necessary resources to achieve it. See if you have the right premises: for instance, if you want to expand your production line or modernize your equipment, you have to see if there is enough space or enough money to do these changes.

If you are dealing with customer service systems, maybe a more sophisticated system will help you business be more profitable. If you have a strong financial support, maybe outsourcing will make things easier for you and you will have the possibility to concentrate on other parts of your business.

See what facilities you have in your company to achieve your goal as it is easier than starting from scratch.

Do not forget to take into consideration your most valuable resource you can rely on – your staff. See if you have the right people to achieve your objectives, if they know what is expected of them. Delegate tasks according to the skills they have, ensuring this way the job is done accurately.

After you have studied carefully all these issues, all you have to do is to set a clear goal, plan each step as we taught you to achieving and you will surely be successful. Bear in mind that it is extremely important to assess the results of your efforts, especially from a financial point of view.

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How To Turn Your Skills Into A Real Online Business

June 24, 2010 by Leave a Comment

Open for businessA lot of the people reading Like Chapaa have a skill set. They are strong in web design, writing, marketing, Web development, or some other different skills.

People with such skills who want to be entrepreneurs often end up selling their skills as services. That usually entails trading money for their time, expertise and experience. It’s the path of least resistance (and risk) and a way to form a source of income. The problem is that while the business might be moderately successful, there is a limit to how successful the business can be. There are only so many hours in a day and only so much that you can charge for these services (no matter how good you are). Since freelancing is not a real business model and does not scale, you should focus these skills on building a system-based business.

Here are some ideas to create a new business based on the skills that you already have.

Scale Your Skills
Instead of doing the work yourself, have 1, 2, 5, 10, or even 50 people do the work for you. Once you have other people doing the work, there is no limit to how big you can grow the business. Start by creating a manual detailing everything that you do and make it a repeatable process that someone else can follow. You will still have to find some people with some ability as you don’t want someone with zero creativity to design high-end websites for your clients. But if you create an efficient process in getting new clients and delivering their service at a reasonable, known cost, you can start scaling the business.

In order to reduce your risk, I would start out with contractors. Pay them on a “per project” basis so you are only obligated to pay when you get paid. Your profits won’t be as high and it can be tough to find reliable contractors with good prices and quality products but once you do, it becomes very easy to scale up your business. Start out with determining your profit margin and you can estimate projects based off of the quote you receive.

Create a “Product”
If your skills are in web design, pick a market and create your best web design that you can sell over and over again. If you create a really great web site with a lot of cool features for restaurants (newsletters, birthday club, email-a-friend), sell it to restaurants operating in different markets. You might charge a lower price for each site but it will require less effort to set up. It’s even something that you could hire a contractor to set up on a per-site basis.

If you are a writer, you can also create a ‘product’ around your writing skills. You just have, for example, to look for something that would benefit by having a well written guide/manual. For instance, many writers make money by writing How-To ebooks for platforms such as Joomla and Drupal. I know others who have created a complete and re-usable business plan which they sell to anyone looking to write a business plan quickly.

If you are an Adsense expert, you could sell a program to similar businesses of keywords and ads that are pre-built and tested to be very effective. Just make sure you don’t sell it to competing clients.

Become a ‘Digital Landlord’
This is very similar to creating a product, the difference being that you do not sell it outright but rent it out and collect a subscription fee. Please have a look at this: Landlord 2.0

The basic idea is to utilise your expertise to create a service. If you are an accountant, you could create an accounting system which you charge a monthly fee for people to use it either online or offline. When most people think of this, they think that it has to be a large undertaking. That is not the case, you do not have to recreate Quickbooks, the secret is to niche – create a simple accounting system specifically for freelance web designers (incidentally, such a system is badly needed).

If you are a marketing guru, you could create a marketing system for very small businesses and freelancers (guys earning 10,000 to 500,000 a month) – a system whereby the businesses completely outsource marketing to you. Again, such a system is badly needed in today’s Kenya (most of these business owners are too busy to market properly and would appreciate some help, as long as it actually generates more business).

Web Site Flipping
basically, this is the selling of websites. It might require a little more investment but you could also bootstrap and start with a small portfolio that you constantly turn over and make more money off of them. But the idea is that you should buy websites, improve them, and then sell them. Maybe it’s a website that just needs a few tweaks to convert better, or a site that needs some basic search engine optimization, one that hasn’t utilized Pay-Per-Click yet, or one that could use all of these changes.

Create systems to effectively find, value, purchase, and improve sites. Most people who flip websites might do it on a “one off” basis. They don’t create systems to repeat the process over and over again. I liken it to real estate flipping companies who have scaled their business so they buy multiple properties, have a select group of vendors they use to improve the properties, and then sell it. They have great systems in place. From the very beginning, they have a set budget and they know what changes they can make and how much value it should add to the price.

Create Software
Ok, nothing too original here but I think this is a case which people think too big. They think the only software worth creating and selling is something that nobody else has created. There are a lot of niche markets for which you can build useful software. You don’t have to create Microsoft Windows, just something that is useful to your targeted niche market.

For example – you could create an online scheduling service for businesses that take appointments like doctors, salons or beauty parlors. There is a lot of scheduling software out there but if you create a product specific for an industry, you have created a successful product.

And the best part about software is that once it’s created, there is very little effort to maintain it. Unlike trading hours for dollars, you can create a mostly passive form of income.

What Do All the Ideas Have in Common?
It probably wasn’t apparently obvious with each of these ideas but they all involve targeting a niche market. You’re not going to be able to create something that works for everyone but if you create something that has utility for a niche market, your system based business can grow quite successfully.

Image courtesy of Pheezy.

Filed Under: Internet Culture, Small Business, Tips Hacking and Reviews Tagged With: , , , , ,

So, You Want To Start A Business?

January 30, 2010 by Leave a Comment

Here is a nice (long) video in which Mr Edward Hess talks about starting a business. He starts out talking with the most common causes of start up failure and ends with taking questions from the audience. The whole talk is filled with interesting and insightful comments by Mr Hess.

Throughout the talk, he stresses one thing: why would a customer want to buy from you? He says that you have to look at this question and answer it realistically. I’ve had the good fortune to start a few businesses and I have to admit that figuring out why people will give you their money is probably the best thing you can do for your business.

Please watch the video:

What do you think?

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How To Start An Online Shop

December 2, 2009 by 15 Comments

One of the most common questions we get goes like, “Hey, how do i set up an online shop?” Because we’re all about seeing the Internet come through for people in Kenya, especially financially, I decided to write an article on how to start your own online shop, easy. Enjoy 🙂

Trust me, it is a very daunting task and it involves a hell of a lot. Are you up for all that? I do not know. I do know one thing though, the opportunity to make lots and lots of money is still very much there. In all markets most online stores are, for lack of better words, a complete waste of time.

No joke – there are so many badly designed and structured online shops out there that you’d be surprised. You could choose any market place and still have a very good shot at making a killing. If only you use correct procedure. And guess what? The wealth of tools available for your use is just unbelievable – challenging the Top Dogs in any market is something very do-able.

Where do you start?
As I said earlier, starting an online shop is no easy task. Should you start your own, you are bound to make lots and lots of mistakes. However, I beg you to always work with this in mind: “Customers first, money second“. Got it? Good, you’ll never go wrong. Many, many businesses mess up this simple task.

Before anything else, you need to ask yourself the same questions you’d ask yourself if you were going into business in the offline world. Do you have something to market? Will people buy what you want to sell? Will they pay enough money for you to make a profit?

Next you’ll need to choose a name for your site/shop. Since this will be your identity, it is VERY important. Take time to choose a good and easy-to-remember name. Read more about this, if need be.

Building your website
Unfortunately, if you want the best results there are only two courses of action:

  1. Hire professionals to build you a site. People like us. 🙂
  2. Do it yourself, but only if you have the technical know-how.

That said, here are some things you should keep in mind:

  • How many products do you have? If you have just a few, your site will look bare. (Depending on how it is built)
  • What type of products are you selling? This will affect how you display them – jewellery will be displayed differently from, say, aquariums. :p
  • You must have good quality pictures of your products.
  • Include item descriptions jameni! Of course your customers want to know this.
  • Ensure that your site loads quickly and that it is easy to navigate.
  • As well as making your site the best it can be for customers, make sure it is very easy for you to update it i.e. add new products or change prices.
  • Make the selling process as easy and as fast as possible. You don’t really need to make your customers register at your site, do you? This is an unnecessary step that will cost you sales!

Because I love my readers, I shall suggest a super easy way to build a top-of-the-range online shop. Listen carefully:

  1. Download wordpress
  2. Install wordpress on a server somewhere. How?
  3. Install this wordpress theme. How?
  4. Install this wordpress plugin. How?
  5. You have your very nice online shop!

Other tools you can use: Magento, osCommerce.

Web hosting
One your website is made, it needs to be hosted somewhere. This is so that it is accessible to the whole of the Internet. Learn more.

If you’re going to handle any kind of financial transactions through your website, you need to make sure your web host offers secure servers. This means that they offer SSL encryption. You should find out whether your prospective web host offers SSL encryption as part of its regular package or charges extra for this service.

When your website is your storefront, if your website is down, your store is closed – or worse, effectively nonexistent. So you need a web host that offers at least a 99% uptime guarantee. While asking about a web host’s uptime guarantee, you might also inquire as to its back up systems in case of emergencies.

There are hundreds of good web hosts out there. I recommend that you choose us. 🙂

Marketing your online shop
The key to online retailing is to strive to get as many people visiting your shop as possible. Please, please keep search engine optimisation (SEO) in mind. If need be, hire someone to do your SEO.

There are some helpful articles here and here. Oh and we are also available to help you with SEO.

Dealing with payments
You will need a way to accept payments online, or at the very least accept orders online. Many modern online shop creation systems (like the ones I suggested earlier) do this right out of the box. If you intend to sell to people in Kenya, it would be helpful to be able to receive payments by ZAP and MPESA. Here’s an article we wrote about this topic.

Conclusion
We haven’t covered everything you need to know in this article, but most of it is up there. You can have your shop ready by next week if you follow what the article says.

Good luck 🙂

PS I was thinking of doing a follow-up article on this topic by going step by step through what I did when setting up an existing online shop. Anyone interested?

Image courtesy of Jesse757.

Filed Under: Small Business Tagged With: , , ,

Six of the Best Banks For Startups In Kenya

October 6, 2009 by 4 Comments

So last week we wrote here about our frustrations in finding a good bank for a young startup business – we had walked in and out of banks for hours and non struck us as particularly attractive for our young business. Following the article on Like Chapaa, we received a lot of emails and other feedback from a whole lot of people giving us advice on which banks would be suitable for startups in Kenya.

Are you a business owner? Are you planning on being one? For your banking needs, try one of these:

  1. Equity Bank. Evans says, “Try Equity bank, I have a business Account with them and its good and even accessing credits is easy.They have helped in the growth of my business,so I m a proud member of the bank. All the best as you start your business.”
  2. Chase Bank – Maingi says, “They are really flexible in terms of handling transactions for instance I comfortably transact without ID…in a nut shell they try to know their customers and treat them as such. Also there are good in Forex. Try them.”
  3. Fina Bank
  4. Bank of Africa
  5. Eco bank
  6. NIC

The banks in the above list are ranked according to the number of recommendations received for each. I hope you will find this useful.

All in all, the picture of banking in Kenya that I got from this experience is not good. At all. Our banks seem to be interested only in making money off their customers and they are very poor at supporting new businesses.

That said, I shall close this post with the best piece of advise that I got. Many thanks to the author, Sagongonyi. Thanks also go to everyone else who helped.

“Most banks will require a six months statement (minimum) for any meaningful assistance. It also depends on the nature of business you would like to engage in. For example if it is a simple transaction like you have an order to supply some items to an organization, Equity can finace you and you agree on how to share the profit.

There are other institutions like GroFin that can finance start up businesses but with a well presented business proposal. They will also require you to contribute a percentage of the initial capital outlay. They will also require you to personally manage your business and you will also share profits with them. They have assisted quite a number of my friends who import second hand Prime Movers. They are in Upper Hill CIC Plaza.

NIC are also good but they require you to have some experience in your business, even 3 months can be ok. Their systems are very good and you can get money in two weeks. They are very clear on what they want and they are very straight forward. They have financed my business for a period of three years now and i am not regretting. No bank can give you 100% financing for a start-up business; better start small and grow it.”

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