Coming to Ghana was a premeditated decision. It was not random. Back in 2010, I reviewed the global economic landscape and noticed that Sub-Saharan Africa (SSA) was one of the few places growing at more than 5 percent per anum.
Having visited several points in China including Hong Kong, Yunnan province, Lhasa, Chengdu, and Beijing as a tourist in 2001, I could not help noticing the rapid development when I visited in 2007 and 2008. That’s what several years of 9 percent GDP growth and concerted government policy can do for a country.
I wanted get in on the ground floor of SSA’s economic development. I chose Ghana for several reasons:
- Reputed to be the most stable and safe country in SSA
- Relatively inexpensive compared with larger markets, e.g. Nigeria, South Africa, Kenya
- The country had experienced >5 percent GDP growth since 2000
I decided to start a business in Ghana for several reasons.
First, I wanted to experiment and challenge myself. For most of my career I had worked in real estate and finance. Finance is known for being hierarchical and hard charging. Everyone is motivated because each person is aware of the financial rewards associated with success. Becoming an entrepreneur meant developing a skill set that I felt I had never cultivated — leadership, managing people, sales, and marketing strategy.
In finance, your position at a bank, e.g. Goldman Sachs, Deutsche Bank, Credit Suisse, gives you enormous influence and power. You are directly or indirectly controlling tens of millions, if not hundreds of millions of dollars. Unfortunately, if someone fires you — which happens frequently — then you also lose this power. Sometimes the individual is left high and dry with a very specific set of skills that cannot be used in many other capacities, e.g. bond syndicate manager, CDO structurer, interest rate sales, proprietary trading.
Given the responsibilities that come with being a husband and a father, I knew that the older I got, the harder it would be to test myself.
Second, I wanted to start something that did not need massive amounts of capital to be viable. What’s the point of starting a company if you need hundreds of thousands or millions of dollars to start up? You basically become an employee of your investors. Furthermore, you spend all your wad on a single bet. Looking at my initial business plan, I believed we could get going for a sub-$30,000 initial investment + a cushion. I had a friend who let us stay at his place for free so the only thing that would cost money was operating the business and my living expenses. Owning the company meant we controlled decisions and could ultimately be held responsible for our success and failures.
Third, I wanted to enter a new market that was growing with a proven American concept. E-commerce hardly exists in Ghana. Our company relies on a subscription model with physical delivery. The success of Amazon suggests that such a company could flourish in a developing country where transportation costs – both fuel and time – were significant. I did a market study, market survey, due diligence of the competitive landscape, made some forecasts, and wrote a business plan. I also noted that profit opportunities were significant if could charge developed world prices and employ developing country labor.
Lastly, I had two ancillary reasons. First, I wanted to be part of the solution rather than problem. I didn’t want to give money away to poor people. Foreign aid has already done enough harm. Second, I thought it would be an adventure.
Jokes on me!
Looking back, I got most of what I wanted except a company that I want to continue investing in.