Sourcing Issues

Experiencing challenges sourcing materials from small time vendors. Interestingly we have to produce 1st line of apparel with designs that leverage materials that can be reliably sourced. At least until we have enough volume to justify going directly to the source or better still manufacture in-house.

Another issue is sourcing from multiple small time vendors. 3 at last count. We can't avoid this right now given the niche space we're in. A space with few vendors and limited selections. This piece meal approach is expensive and time consuming.

At this rate we'll have our line out in the winter.

Watching Paint Dry

Things having been moving at a snail pace. Daytime gig taking up too much of spare time. Or more like I don't see enough dollar signs yet with the startup.

Began work on basic stuff while waiting for imported materials to arrive for limited production.

1. Administrative stuff - bank accounts, shipping, tax ids etc. Haven't made any sales yet but local and fed tax authorities already calling.
2. Created new brand for clothing line
3. Signed up with logo development co, logoworks. Should have completed logo in a week.
4. Working with California Designer to create 2 new prototypes
5. Talking to web developers for ecommerce site development, apparently this is their "xmas season so its taking 60-90days to complete orders.
6. In parallel, Setting up a photoshoot
7. Working with a Fashion photographer and modelling agency( I want an upscale image for the line)

I'm now operating in the world of the beautiful people models, exotic locations, swag. Only need to start making money to complete the picture.

Seriously, I'm more concerned with developing a print brochure first while my journey men ecommerce developers get there act together. The brochure can help tell the story when I meet with potential JV partners in the next few weeks.

The goal is to set up an International JV with manufacturing done in our target local market. This retail play is all about emerging markets and the aspirations of the emerging middle class. Its not about opening the 1 millionth ecommerce retail store. If we operate only as a US based e-tailer, I don't see how we can rise above the many mom and pop operations out here. Basically this wouldn't be worth doing.

To be successful we have to get serious buy-in to operate on the scale that will allow us to operate in and target emerging market customers.

Prototypes well received on to production

First batch of Prototypes/Samples for new clothing line well received. We received a very passionate response from our informal focus groups(i.e. family & friends). The response to the line was really encouraging. There are a multitude of designers/retailers out there but we believe we can cultivate a passionate and committed network of supporters that hopefully become customers. Now we don't know for sure how much each segment will be willing to pay for our upscale clothing.

Moving on to production phase. We'll be expanding the number of styles and producing a limited quantity over the next 6 weeks. I'll let you all know when we launch.

Waiting on Africa to change

We keep on waiting

Waiting on Africa to change…Our fundraising timelines (referring to the oil & gas bplan) are contingent on political conditions not deteriorating any further. We should have more clarity on the political situation in our target market in the next 8 weeks. So we have an 8 week deadline for completion of the business plan.

At the same time I ask myself are we being too cautious. Should our potential investors risk appetite determine whether we are a go/no go for the business? Baron Rothschild once said that the time to make money was when there was blood on the streets. Not much empathy in the statement but to make huge gains in emerging markets we have to be very good at managing risk (financial and physical).

Not going to overanalyze anything at this point. Just going to plough ahead with the business plan and see what the numbers look like.

Founders Agreement Negotiated

Our founders agreement discussions were fairly smooth. We agreed on the major points that will make up our founders agreement. We had discussions around what business the company will be in, where it will be located, and what our roles and equity ownership will be. We also discussed how we would treat equity ownership in future businesses.

Equity was divvied up for this particular venture based on industry backgrounds, prior work done to develop this opportunity, and connections each partner was bringing to the table. We both have business backgrounds so that didn't count. How we divvied up equity was the only tricky aspect of our discussions. It helped that we both felt this was not a win/lose negotiation. There will be other ventures where different experiences and connections are required. So both parties were willing to give and take.

Equally important we discussed a deadline by which we had to begin working on the venture full time. Both of us have gigs with major demands on our time. If we didn't set a deadline it would have been very easy to lose momentum or get snared by corporate america's golden handcuffs.

We also discussed duration of the founding period as well as the level of capital we are looking to raise.

Key areas highlighted below:

1. Company description

2. Potential Operating Roles and Decision Making

3. Future Businesses

4. Founders Exit

It's All About Execution

Status update:

Making great progress towards launching a new business. There have been multiple iterations of initial ideas - I don't put much weight on the idea phase. It's all about execution.

Initial idea was tech heavy and relied upon multiple partners in the US to execute. When time came to commit my US partners lost enthusiasm for an African venture.

At that point I decided to keep it simple. My background is in technology/telecom but I am working with my wife (she loves to shop and has a pretty good eye for fashion) on prototypes for a new line of women's clothing for an online retail play. We're bringing a unique perspective. I'll let you know when we launch in June. The important things to consider are the low startup costs, low barriers to entry, and modest upside.

Also just began working with a high school buddy, who has a Business and Oil & Gas background, on a more complex but very promising business idea. To launch we will have to bring on institutional investors. We spent the weekend discussing our founders agreement.

I know its not ideal working on multiple initiatives but I'm taking a portfolio approach for now. I also definitely feel more comfortable with these two initiatives because I'm working with partners in both cases where we have a long history.

Minority Startup Powering The World

USA Today writes about Kase Lawal of CAMAC International:

This particular entrepreneur's story has become even more relevant for me today as I think about what model of entrepreneurship I plan to pursue. It is evident that one has to find a way to develop a unique competitive advantage. A melding of the unique knowledge and understanding of the US and Africa Markets. Kase was able to leverage both worlds to build a global business. The US gave him access to low cost financing and technical expertise. Africa gave him access to rich resources. He couldn't do one without the other. I know everyone's story is different and things may have changed but this model is definitely worth considering.

It's also useful to consider whether one needs to leverage one more world - China. Today, as an African entrepreneur, China offers the lowest cost of financing and technical expertise. Africa is also considered important. No one is laughing when you cold call to pitch an African investment idea.

What's In A Name?

Currently working on a businessplan for our venture and at the point where we need to come up with a name. The venture is focused on Africa. I look at some of the big names out of China. Many have indigenous names. There's Xunlei("Thunder), Baidu(Poetic Chinese Name), Sogou(search dog), and countless others. I can't say that approach was helpful to Chinese networking giant, Huawei in the US market. Perhaps that had to do more with the maturity of the market. The company has been very successful in frontier markets like Africa(especially selling equipment on credit and at much lower costs). I definitely have a preference for an indigenous name. One that has meaning.

The question is do you gain more loyalty from the target market with a local name? What happens when you are dealing with a discontiguos market like Africa with different languages in different markets. Do you lose customers when you use a name from one part of the continent?

Of course a name is only a small part of the equation. It's a nice touch. Once we get this out of the way need to get back to the numbers. The numbers for the business don't look so great. Not going to get me to my first billion(a million is no longer what it used to be) anytime soon.

Nothing to lose - Outsiders more likely to start businesses

Knowledge at Wharton writes:

According to Sam Hamadeh, founder and chief executive of Vault.com, a New York publisher of job information, being an outsider increases the likelihood that someone will want to start his own venture. "The more you are part of the establishment, the more you are giving up to start a business," he said. "Minorities, immigrants, gays and lesbians are all more likely to start businesses than other people."........

Tell me about it. In many cases outsiders are left with no choice!

It's definitely exciting starting a business. Some will say its in the blood. I think everyone has a yearning for a life of entrepreneurship. Some just want it more. What keeps us all from going around starting businesses will nilly are all those golden handcuffs. In some places like Europe its actually society that discourages entrepreneurship. You'd better succeed first time around.

The funny thing is that insiders with the most to lose probably have the best chance at success. They have the money, the connections, and the credibility. Equally important they can always get a job. The reality however is that this group has more trepidation about starting a business. The fear of failure is so great. In many cases for outsiders who have embarked on this entrepreneurial journey there is no going back.

What is your core business?

I came across this interesting Microsoft interview in Businessweek. In case you have forgotten Microsoft's core business is software. Knowing your core business gives you clarity and a sense of purpose. It definitely simplifies your decision making when you're trying to start a new business or enter a new industry.

I applied this thinking in a meeting I had with my potential startup partners. It became very clear that the technology we had been discussing was not essentially what we were about. Technology is constantly changing but our vision will remain the same. Once we crystallized our vision, we all became completely focused on how we went about actualizing that vision.