Cheers To Building A Thriving Entrepreneurial Ecosystem In Abuja Suburbs — OG Capital

We launched OG Capital at 7:00 PM on the 1st of January this year. There was no crowd and it was not a luxurious shindig. I called the team together and we said a simple prayer. We had just concluded an exciting 6-month pilot testing the day before. That was it.

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But this isn't about the quiet launch, it’s about everything that has led us to this moment. I have founded an eponymous entity that operates in a highly regulated finance industry without advice and with little regard for the status.

A little About Myself

Let there be no confusion, I have no background in finance, economics or business administration. I studied chemical engineering, I don’t have an MBA and I am not the richest yet. You could say that I have no right to do what I am doing.

However, my motivation allows me to rise above cosmetic qualifications, my motivation is hardship, the real one. In future, I will obtain a CFA for the sake of credibility - but survival comes first for me, just like a majority of young people who are living in this unforgiving capitalist economy.

Almost everything I know is self learned. I immerse myself everyday in any piece of content I find on NASDAQ, Fortune, Medium, Hubspot, Inc, Bloomberg, Wall Street Journal and Harvard Business Review. Perhaps, I am too obsessed with understanding the process of losing and acquiring wealth.

Till date, I have written around 200 business plans, grant applications and proposals for clients from all over the world. I also receive high profile invitations to write columns and make commentaries; hence my feature on Jeff Bullas, Fit Small Business, Socialnomics and among many others.

With this in mind, I looked at my immediate environment through an optimization lens, and I recognized a recurring theme in the ecosystem; failing businesses, failing businesses, failing businesses. I thought it would be a great idea to do something about it.

So What Does The Company Actually Do?

OG Capital identifies struggling businesses with high growth potential and turns them into enduring companies by providing them with business planning and financial inclusion.

In the next 36 months, we have decided to focus on the under-banked enterprises at the bottom of the micro credit pyramid in JKMN (Jikwoyi, Karu, Maraba and Nyanya). We are currently valued at 20 million Naira, a valuation that is reinforced by our admittance into the prestigious Tony Elumelu Foundation.

We are not trying to save the world, everyone is already trying to do that. We are not reinventing the wheel either, we are only bringing some attention to a neglected demographic.

This is on the basis that 80% of small businesses in our focus area fail within 5 years due to poor planning, inadequate funding and wrong business practices.

We organized Copywriting Basics, a well attended online class for aspiring technical writers. We also organized Karu Startup Brunch, a meet and greet session designed to enable JKMN entrepreneurs engage in peer to peer sharing and networking. We are currently running an online grant application class with more that 400 participants.

The Team

One of the best moves I made in 2020 was to convince Bosede Olaniyan to work with me on this project as COO. This automatically meant I had to dilute my stake in the company and offer up some equity, a move I made with gladness. She has been an absolute joy to work with. I also dragged my long time friend, Elegbe Samuel (E Sam) into the crew.

We are leveraging on Bose’s background in project management, and E Sam’s detail orientation to develop a company that is relevant within the addressable area. Our goal is to become synonymous with small business development while rapidly acquiring market share within 36 months.

We also worked with Elizabeth Ochai. She created mock social media campaigns and she did a hell of a job even while in school.

What We Discovered During Testing in JKMN

In the 6 months between the 1st June and 31st December 2019, we subjected the framework to a pilot phase with an initial investment of N 250,000 Naira. We did this to ensure an effective implementation of the business model at market entry.

The results were tremendous; we achieved an outrageous 170% ROI with a potential to hit 69% CAGR in 12 months. But more importantly, below are some of the things we learned;

(a) There are over 2 million people and at least 50,000 businesses in JKMN. This population is growing at the rate of 40% YoY. The demand for our service grew 4x more than we expected and our budget ran out.

(b) 75% of business people will apply for funding to solve personal needs rather than business needs. This has led us to understand that we are operating within a population that practices subsistence entrepreneurship.

(c) As a consequence of (b) above, 66% of business people will be unable to finance their debt using revenue, since the funding they receive will have no net impact on their business operations.

(d) Equipment financing is a more appropriate form of debt for our audience and it offers us a better route to market. With this, our customers can acquire capital asset that can boost their productivity, and may be used as security. Four months into testing, my team concluded that this method is less risky for all parties with regards to (b) and (c) above. A win win.

(f) Iterations are a necessity and failure is a good thing. We changed our approach about 4 times in order to obtain the best possible outcome within the test period. We kept failing and editing the model, until we found a sweet spot.

(g) JKMN is uncharted territory. There is no behavioral data to work with, there is no template to rely on. A majority of the businesses we worked with have no financial records, no metrics, no lifetime value figures, no equity. This only means one thing; it is our responsibility to create a quantitative and qualitative analytics platform for this demographic.

Conclusion

For me, this is not a fad. This is the end game, this is what I want to be in future; a proper venture capitalist.

However, I and the team are not bothered about preset standards of success or failure, we are not very concerned about negative or positive opinion either. We are creating our own yardsticks for measuring growth and moving at our own pace.

We understand that changes are inevitable and we are learning to adapt to new realities as they come daily. The journey just begun, see you same time in February.

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