My Boy Dream, Starting a business

About my dream of starting a business and what I have learnt so far.

We are have dreams, visions of the kind of life we want. For some people this is clear from an early age for others it is not they figure it out as they go.

When I was 5 years old or so, I don’t how or why but I decided I wanted to be an engineer. I was on of those tinkering stubborn breaking all the things in the house and cutting open all the cushioned chairs at home lol.

As I grew older I became more specific, I decided I wanted to become a Chemical Engineer, then Petro-chemical Engineer… I don’t remember why but I suspect it was because working in the Oil Sector was a lucrative thing todo then. Then it changed again, I decided I wanted to own a Conglomerate. I really don’t know how I came about that, because I think I was still less than 10 years when I decided this. Up from then till about a year ago I hadn’t actually gone and opened a dictionary to know the exact meaning of “Conglomerate”, I just knew it had something to do with owning an empire.

Something happened when I was 11 years, I was introduced into the world of internet. I kind of had a second home in the house of our next door neighbour, Eze, kinda like my computer mentor had just come back to Nigeria and set up the first quasi cyber cafe in the city. Luckily for me He wasn’t just a business man, but more of a hacker.

Right from 2001 when I opened my first email “henrino3@yahoo.com”. I became born again as henrino and thus became my journey into the world of computer science.

Fast forward a 15 years later, I am at the cross-hairs between computers and technology which has been what I have been known for right from when I started helping my teacher in JSS1 teach my class and entrepreneurship, my pathway to building my childhood dream.

It’s supposed to be easy at this point one would think, after-all I have been a tech guy all my life and I wanted to build businesses right from when I was a kid. But no! there is another level of complexity, I have to find a problem that is a pain for a large customer segment and provide a pain-killer with enough value to make them pay me for it.

“What problem are you passionate enough to solve”, Damn! ¯\_(ツ)_/¯

I have been asking myself this question for half a year now…

And have decided to stop asking it…

Maybe answering this question may have been easy if I had worked in an industry before now and have gleaned some sort of industry expertise.

Since my creativity has failed me in coming up with any organic idea, I will try the rational in-organic well thought out plan.

I will now consider the following when looking for business ideas to invest in in future

1. At least a $1 billion addressable market
This criteria is inherently personal and depends on the entrepreneur’s ambition, but there are good reasons to target larger markets:

  • It’s easier to obtain funding
  • Many Internet businesses have a certain amount of fixed costs but limited variable costs, therefore the larger the business, the higher the net margin
  • I find it more interesting to build larger companies

This does not mean that the market must be a $1 billion market at the launch of the company, but that it must have the potential.

2. A valid business model understood from the get go

There is only a 5% chance that a company created today will still be around in 5 years. I have not seen official statistics, but many VCs seem to believe that only 0.1% of the company started without a valid business model succeed.

It’s so risky to create a company to begin with, I would rather have all the odds in my favor…

For clarification purposes, by having a valid business model I mean understanding how you are going to generate money and having a good sense of the gross and net margins at the creation of the company.

3. A business where you have a real shot at being one of the top players — at least in the region you are targeting

Avoid entering businesses where many players are well funded or where the incumbents have a sustainable advantage. That is not to say not to enter businesses where there are incumbents — just make you have a hard to replicate edge on them — after all Skype did extremely well because it entered the telephony market with a radically lower cost structure than the traditional telcos and used it to its advantage.

4. A scalable idea
This is again a very personal criteria. Fast foods and restaurants are great businesses, but I would rather not be in a business where I need to open a new store to increase my sales as it leads to slower growth and greater capital requirements. Internet businesses are magical as they give you the ability to build and grow global companies in record times — just look at what Google, eBay, Skype and many others accomplished in less than 10 years — in some cases in less than 5 years!

5. A business that is in a rapidly growing market

A rising tide raises all boats. Growing markets generate more interest from the press, consumers, customers and suppliers. Moreover, if you are gaining share in a rapidly growing market, this can create exponential growth.

6. An idea that I know how to execute on or can learn how to execute on

For now I will probably focus on technology ideas as I have a clear comparative advantage in the field as I understand technology and know how to manage technology organizations.

7. An idea that I like and want to do!

One of the keys to happiness and success in life is to do things you love and are passionate about…

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