Miva Masterclass with Sim Shagaya’s Transcript

Miva Open University hosted a transformative Masterclass session featuring Sim Shagaya, Chancellor of the University and Founder/Group CEO of the uLesson Group, on February 3rd, 2024, at its Abuja campus. The Masterclass, open to both Miva learners and the public, offered valuable insights and practical advice on entrepreneurship, innovation, and navigating the business landscape.

Miva Masterclasses are curated sessions where industry leaders share real-world expertise relevant to students’ academic pursuits. Sim Shagaya, recognized for his groundbreaking work in innovative entrepreneurship and education technology, captivated the audience with his journey and learnings.

Transcript

Aniekeme Umoh: Alright. Good morning, everyone. Happy Saturday. Thank you so much for joining us here at the Miva campus in Abuja. Thank you to everyone who’s joining us online, on Google Meet, on YouTube. We’re so excited to have you here for our very first masterclass of 2024. My name is Aniekeme Umoh. I’m the vice president of operations for Miva Open University. And with me, I have a man who really needs no introduction, but for the sake of formality, I will introduce him, okay? Sim Shagaya.

Sim is the Chancellor of Miva Open University and Founder and Group CEO of the uLesson Group which comprises Miva and uLesson Education, which in 2023 was ranked #1 on Fast Company’s Most Innovative Companies in Europe, Middle East and Africa. Sim is the founder and former CEO of Konga, one of West Africa’s largest e-commerce platforms and the founder of E-Motion Advertising, a leading out-of-home media company. 

A serial entrepreneur with an illustrious career that includes working as a banker at Rand Merchant Bank in South Africa and becoming Google’s Head for Africa, Sim was named in Forbes’ list of 10 Most Powerful Men in Africa. 

Aniekeme Umoh:

This resume is powerful, but let me finish. Sim trained as an electrical engineer at the George Washington University and Dartmouth College where he received bachelor’s and master’s, respectively. He also earned an MBA from the Harvard Business School. – Sim Shagaya.

Sim Shagaya:

You should hear her resume.

Aniekeme Umoh:

Well, we’re gonna keep the focus on you, Sim. But before we go full into today’s topic, as a serial entrepreneur, right, if your business had a theme song, what would it be?

Sim Shagaya:

That would be stronger by Kanye West.

Aniekeme Umoh:

That’s a good one. 

Sim Shagaya:

You guys know that one?

Aniekeme Umoh/Audience

Yes. 

Sim Shagaya:

Alright. Don’t make me rap to it.

Aniekeme Umoh:

Alright. So the theme for today’s masterclass is I have an idea. What next? The art of execution. So I would love for you to really talk us through that ‘what’s next’ part. So I have a couple questions. We’ll go through them. The audience here in Abuja will definitely have questions. Our students who are present, and then we’ll have questions from the folks online, which we’ll also try to get to as well.

So, you know, we say that everyone has an idea, but that may not be the case for some people. Some people struggle with actually coming up with ideas. As someone who hasn’t struggled with that, given that you’ve created several companies And then several products within those companies, how do you generate your business ideas?

Sim Shagaya:

Okay. So, you wouldn’t think ideas are something that come through a process. I mean, certainly, earlier on, I think in my entrepreneurial life, I wasn’t as deliberate in coming up with ideas, which also meant a lot of the things that I tried just didn’t work. I feel like from the age of about maybe 25 to 30, I tried, I don’t know, maybe 10, 12 different things.

Aniekeme Umoh:

Wow.

Sim Shagaya:

And it was very, very random, and it wasn’t very purposeful. But it turns out that there actually is kind of, like, a deliberate framework you can use to come up with ideas, and I’ve kind of refined it over the course of my journey. So, you know, an idea is basically a vision of the future. Right? You’re seeing a world that other people see also, but you are seeing a world that is different. And it could be something that’s really big, with big regional or even global implications, or it could be something at the corner of your street. You see a pharmacy there where there’s no pharmacy right now. But the selection of that idea, If you want to maximize the chance of success, has to go through, in my mind, several filters. So, you know, think of it as a spectrum.

On the one hand, you have people that are kind of frozen out of fear and wait for that perfect idea and so never jump into anything; never do anything. And then on the other end of that spectrum is me when I was young, where anything that comes to mind, you wake up and you just run and go and do it. And then it doesn’t work, and then you turn around. But I think the right answer is somewhere in between. And how you find that in between, generally, what I do so before you listen, for example, I had a portfolio of Ideas.

They are, you can think of it as like venture capitalists. Venture capitalists are these investors that invest in businesses, And they will often have a portfolio of companies that they’re investing in and some of those companies would do well, and some will fail, etcetera. The entrepreneur has to think about ideas the same way. I think you have to have a portfolio of these ideas in your mind. 3, 4, 5, 6, even 10 and then you kind of test them out over a range of criteria to find the right one.

But generally it’s not a good idea. So before uLesson, I was looking into agriculture. I was looking into building solar power plants. There were a range of things I was looking at; uLesson is just one of those things. And then, you know, you spend a bunch of time kind of testing each one of those ideas, and you test them against many criteria. So I think the most important one, and we don’t give this enough credit, is that the most successful ideas generally will lie In the field or the realm of the entrepreneur’s specialization. So what do I mean by that? You know, that pharmacy idea I  said before; generally speaking, if you’re gonna start a pharmacy, your chances of being successful or the team’s chances of being successful would be improved if there was a pharmacist on the team.

If you’re going to start Google, it would help that you are studying computer science as Larry Page and Sergey Brin did at Stanford.

And so, when I really went into it, for example, when I was looking at agriculture, I was excited about the prospects of it. It wasn’t that I had passion for it. It wasn’t there. The things I thought I could do weren’t there, but I realized that I just didn’t have the domain expertise. And time is limited. Right? I mean, we’ve been doing  uLesson for 5 years now. So 5 years is a chunky amount of time if you wanna spend your life on something you wanna maximize success. So that’s one thing. You wanna kind of figure out what is in your domain of expertise and not just you individually, but, like, your Team. So if you’re going to do something, again, to stretch this pharmacy idea that is at an intersection of Technology, Information technology, and pharmacies. Then one member of the team ideally should be a pharmacist or a doctor or something like that; and the other member of the team should know something about tech. Then your chances of success are maximized. So that’s one whole universe of things.

Then, there are a couple of other things also. I think a bunch of research has been done about this. But in my mind, I found this to be really true; this is not really original to me. More than the team, which is an incredibly important factor (we’ll talk about that, hopefully, over and over today) is the timing. You can have a great team, you can have all the drive, you can have all the passion for what you’re trying to do, but your timing can be completely wrong. And so in thinking about timing, you have to ask, has something changed in the world that is enabling this right now. There are many ideas.

I mean, you’ll be amazed. Many of the things we’re doing now, are ideas that entrepreneurs had, in Nigeria, around the world, 50, 60, 70, 80 years ago, there are examples of that.

Aniekeme Umoh:

But the timing wasn’t right.

Sim Shagaya:

The timing was just completely off. There’s nothing really new about human vision. There are people that sat here a 100 years ago, and I can imagine a day will come when education would change and people would not need to go to a physical space to learn. I can imagine somebody was thinking that in my mind’s eye, 50, 60 years ago.

But then the tools and the context weren’t there. When, you know, I got into this, AY got into this, couple of people in this room were here with us at the very beginning. The timing was right at that point. So, you know, 4g, 4th generation wireless networks has started making their way around the country. So that was in place. Forget about temporary things like COVID. That was like a temporary propellant. But there are a lot of contextual things in place, so timing is very important. I feel like there are some things that I’ve done that the timing just wasn’t right.

And then there’s, II don’t know if passion is the right word. Do you have an emotional attachment to it? Are you emotional about this thing you’re pursuing? I think that’s important, because doing this work of building a business –  first of all, I have to say it’s not for everybody. I think we’ve kind of started to romanticize this whole work.

Aniekeme Umoh:

Entrepreneurship?

Sim Shagaya:

Yeah. Exactly. And start to believe it’s for everybody, and it really isn’t. It’s  a select few, group of very bold, daring people, slightly foolish that feel like they can change the world. And you have to have an emotional attachment to it because it’s hard. It’s really, really hard for many reasons. Any entrepreneur who’s been successful or has even failed will tell you that it’s hard. And so you have to have something driving you beyond money.

You have to really ask yourself; because if it’s money you’re optimizing for, entrepreneurship is not necessarily the way you can go; there are a range of other ways you can make money. So, all of these things, I think, feed into sort of your chances of idea. You have to be very tactical, have a portfolio of them, test them. if you want to do agriculture, for example, you can’t sit in a city, you have to go into the farm, spend 2 weeks there, And ask yourself, ‘actually, can I do this’? Test all of these ideas in a portfolio. Filter it for that. Has something changed in the world that’s enabling this right now that wasn’t there before.

The timing of it, that’s very important. Am I sufficiently passionate about solving this problem? And then you can pick the right thing. And do I have domain expertise to make this happen?

Aniekeme Umoh:

You answered even some of the further questions that we had about validating the feasibility of the idea. So thank you for that. When you’re testing the idea, you mentioned the example of agriculture actually going into the farm. But on paper or if you’re taking, like, a business or entrepreneurship course, you might be told about a business plan, creating a business plan. Right?

Sim Shagaya:

Yeah.

Aniekeme Umoh:

How important should that be to the what next to the execution?

Sim Shagaya:

So the whole notion of a business plan has changed a lot; I feel like, since I was an undergrad. So when I was an undergraduate, there was actually a class, where they  made us write business plans and I was in engineering school, and we didn’t like it very much. But, nowadays, that’s changed completely. I think there’s a realization that has come to the mind of investors. So these are very savvy, very knowledgeable experienced investors that don’t expect business plans often. And I think that’s built on the fact that things change so much. So what is a business plan? Right? It is here’s the opportunity I’m pursuing. Here is my differentiation. Here’s how I’m going to go about it. Here’s what the team is going to look like. Here’s what my first income statement looks like. And even to the degree you know how to do all of those things. The truth is that all of those things will change radically. Over the course of the business. I can’t think of 1 facet of uLesson that, myself, Ayoluwa, Magdalene, some of the people in this room that were there at the beginning that we were operating on that has remained Same.

The only things that have essentially remained the same are our values. The values have remained the same. And maybe we’ve crystallized them and articulated them, but the operating structure of the business, the financial model, the products we built, it’s all changed. So for me, at least, the power of the investor, I don’t think a business plan is important per se. Business plans have given way to the deck.

Aniekeme Umoh:

Yes. Pitch decks.

Sim Shagaya:

The pitch deck, yeah. So the 15, 20 slide pitch deck that kind of outlines your idea and outlines what you’re trying to do, and it’s definitely much less intensive, but I think it has as much utility as a 30 page word document. I don’t think that is as important as say a Tuesday.

Aniekeme Umoh:

Alright. So if we’re moving away from that then to the actual, like, Testing and validation. Sometimes you would build a minimum viable product, an MVP or a prototype. Right? I’d like to use a specific real time example here. So Ulesson you’ve talked about and I mentioned earlier, uLesson is launching a new product this quarter. I know that it’s one you’re really excited about.

Sim Shagaya:

Yeah.

Aniekeme Umoh:

Can you share a bit about that product, ‘Classboard’, and how important it is to create an MVP or a prototype when you’re moving from idea to, in this case, product.

Sim Shagaya:

Okay. So the classboard is something I’m really excited about. It was actually the initial vision for uLesson. So far, uLesson has sold products to homes, in a supplementary context. So we supplement the core education that a primary or secondary school student is experiencing. But classboard represents our 1st push into the classroom, and it’s going to cause us to repeat many things.

The product itself is physically different. It’s kind of to the degree, you buy a hardware, It’s captured on the tablet, and the kid uses the tablet, and it’s great, and it works. But the classboard is, you know, a big 65 inch class.

Aniekeme Umoh:

Smart board?

Sim Shagaya:

Yeah. Smart board. A multi touch screen, but it carries all of the curriculum and academic power of uLesson. But that causes you to change. Everything now comes to that question. The way we sold the classic uLesson product is very different from the way we are going to sell classboards.

The way our Supply chain looks is going to change everything, the entire DNA of the product. Well, not entire, but I would say sort of maybe 50% of the DNA changes. So this is important. This is important for 1 MVP, why you just have to get a minimum viable product out there. So a minimum viable product is what is the least what is that minimum product you can use to get to market? Not because you are lazy, not because you don’t want to do the work

Aniekeme Umoh:

But to validate?

Sim Shagaya:

But to validate it. Paradoxically, if you try and perfect it, many times, that doesn’t work. So why is it important to do that is because even in the process of creating  classboard and getting it to market, what we are doing now, our colleagues are now doing focus groups with teachers.

A lot of us are doing focus groups with teachers. We’re talking to teachers, trying to find out whether we’re doing things right. We’re talking to customers, we’re trying to find if out our pricing is right. And so in that sense, the creation of a new product. It’s a beautiful thing because it’s not unilateral. It’s not the entrepreneur and his or her team standing there and saying, I’m bringing something to the market. It’s a really collaborative process between you and the market.

You have to listen to the market, and the market will talk to you. It’s amazing how the market talks. So I’m just going to digress for a second. The challenge we have, I certainly had when I was much less experienced, is that at first, I didn’t realize the market could speak to me, and so I didn’t even create the channels for the market to speak to me. And so, coming back to classic uLesson, for example, when we first went to market, one of the things we did is we said everybody had to get on the phone and do customer service and do sales. Because in the process of selling, the customer will say, well, do you have this? Do you have that? And those are not comments that you should just brush off; those are comments you should bring back to the team and, say, ‘here’s what the market is saying’.

So we need to adjust and adapt and amend and mold it this way and shape it that way. It just improves your chances of success so greatly. That process of collaborating with the market. The market doesn’t mean it’s doing it, But it’s telling you what it wants. Take class board, for example. It’s a minor thing. So it’s this great product I wish we had slightly some time, and I’ll show it to you. 

So far, the market’s been really excited about it. Schools are excited about it. We’re getting all kinds of pre-orders. But some of the comments coming back is, ‘now I have this thing in house, and I’m worried about harmattan and dust and, you know, elements. I need to cover it somehow.’ 

And so that came back to the management meeting, and we’re like, we need to design something that looks like a suit jacket, And let’s cost this out and see if it changes the margins and the profit. And we need to go make a jacket to cover this thing, wnd we need to think about the customer. It needs to be zipped in this particular way and put the logo on it. That is listening to the market. If you don’t, if you just dismiss it and you say, look. ‘here’s what I have. Buy it, take it or leave it.’  Then you come up with a suboptimal solution…

Aniekeme Umoh:

Right. So it sounds like when a prospective entrepreneur is thinking about this prototype MVP process Yeah?

Sim Shagaya:

They should

Aniekeme Umoh:

By thinking about it from, like, the why or why they’re doing it, which is this opportunity for them to not only validate but listen to the market.

Sim Shagaya: 

Yes. Absolutely.

Aniekeme Umoh:

Wonderful. This is actually a good segue because,  now you’re interacting with the market, you open yourself up to liability, potentially. So let’s talk about some legal considerations.

When you’re starting a business, of course, things should be like, everything is important. It should be taken seriously. But for you, 2 facets to this question. 1, is there one legal consideration that you would never overlook as a business owner? And then, 2, is there any experience that you’ve had, in the legal aspect of business? A building that has kind of embedded a certain type of vigilance where legal is concerned for you.

Sim Shagaya:

If you look at the university we’re building together, it has regulatory oversight. There’s deep regulation. We have a regulator, the National Universities Commission has given us license to do this. In the spur of businesses that are regulated, whether that’s hospitals or universities or telecom companies or oil it’s things like this.

Aniekeme Umoh:

Financial institutions?

Sim Shagaya:

Financial institutions. I would not overlook regulation at all.I think it’s incredibly important that you consider regulation and you build that into sort of your financial model in your mind. That’s very important. In the case of businesses, generally, I haven’t really experienced any sort of litigation or anything like that per se. You wanna fulfill righteousness. You want to register your company, you wanna make sure you’re paying your taxes.

You want to make provisions for all of those things. But I think you wanna ask yourself first and foremost, without elaborating it too much, is that ‘am I subject to regulation?’ And hope in the context of trying to avoid regulation, ‘oh, the regulator won’t find me’ or, you know, you’re just doing something illegal. Hope is not a strategy in the context of regulation.

Aniekeme Umoh:

Alright. Cool. You’ve mentioned something here about baking in regulation into your financial model. You’re even thinking about that.

Sim Shagaya:

Yes.

Aniekeme Umoh:

Money is a big aspect to starting and running a business. Can you give just, like, an overview about this, like, funding and financing, maybe with the lens of some of the companies that you’ve built in the past.

Sim Shagaya:

Yes. Let’s start here, Aniekeme. So you have to remove from your mind that funding is tied, strictly to an investor. I think that’s also something that we’re seeing these days that I don’t think is healthy. Money can come from several different ways. The best way is from customers. That’s always the best way. The second is from investors, which I just mentioned, and that can be, investors that are not yourself. So venture capitalist, private equity, or it can be your own money, which is time bootstrapping.

Generally. So my money in my account, I will withdraw my money, and I’m gonna use my own money to do this. That is always a very powerful thing, and it actually is a really strong signal to investors, Not so much to customers, but to investors that, you know, she has put her own skin in the game.

Aniekeme Umoh:

Right.

Sim Shagaya:

That’s a really important one. So I think back to my 1st business, which actually, met some successes, this outdoor billboard business that I’ve long sold, and the entire investment for the 1st year or 2 was by myself and a friend of mine. So this was our money. We didn’t go out there to raise any money. And it motivates you, and it focuses your mind. I think, in a way that none of the other categories of money can focus your mind.

And then the 4th way, which is more important in Nigeria, not so much in other markets, is grants. Some people will use grants, which is valid. Anywhere you get money, you take it. But, I find that the healthiest or the most desirable category is the customer.

Aniekeme Umoh:

Yeah.

Sim Shagaya:

So, you know, the best business in the world is the business in which the customer has given you money before you’ve produced the product to say, go and the product. That’s gold. Right? And that actually happens. So there are these platforms these days. We haven’t really found one in Nigeria, like

Aniekeme Umoh:

GoFundMe. Samsung?

Sim Shagaya:

Kickstarter. Yeah, GoFundMe. We’ve tried to do it in Nigeria in the context of agriculture. I think a company like that will thrive. But, these are very powerful platforms because you advertise and put your product on there. You do a video. You do a little product demo and then a bunch of people who want to buy the product will give you money and say go and make it. When you’re done making it, I want one kind of thing. 

So that’s a powerful thing. But I think, generally speaking, you want to put some skin in the game. And that can be money. And if you don’t have money, that can be time. And, I should also mention, it also means that your 1st business, or at least even if it’s only 1 business you grew through this, you know, the precious time you have, will start small. It always starts small and then you roll  out.

So I’ve had this history of taking my winnings from a business and doubling down into the next one. So some of the funding that went into Konga was my willingness from the billboard and then some of the startup capital for your uLesson were some of the winnings from Konga. You just always kind of double down, which maybe some people will tell me that’s not so great. You gotta stop doubling down at some point. But, yeah.

Aniekeme Umoh:

You win big at the end of it. So Yeah.

Sim Shagaya:

No sure. Hopefully.

Aniekeme Umoh:

You’re banking on who? No banking on execution. Alright. So part of, you know, executing, you have a product. Maybe you have a team. The customers have given you some money. You put some of your money into it. How do you now, like, execute marketing first of all, how do you develop a successful marketing strategy for a new venture or a new product?

Sim Shagaya:

So marketing is incredibly important. There are different people that have different kinds of philosophies around this, but I think the differences are just on the superficial level. So if you look at a powerful brand, an automotive, you know, electric vehicle brand that has taken off, that has captured the world’s imagination is Tesla.  And they are notorious for not doing any advertising. But I think with all due respect to the founder, somebody that I just am in awe of. I think the truth is that because of his personal brand and his reach, they actually do advertising. It’s just that it’s free. So that said, marketing is important. I believe very strongly that the product should lead. You can’t lead with marketing every time. In my experience, I’ve tried to do that or in the case studies that I’ve observed, what I’ve experienced from friends, you lead with a bunch of advertising. What ends up happening is you mess up the economics of your business.

Aniekeme Umoh:

How so?

Sim Shagaya:

So you can basically let me put it in this more simplistic form. If I had a thousand naira today and I gave you that 1,000 naira to buy a 500 naira note from you, would you sell it to me? You would sell me 500 for 1,000 yeah. So that’s the most simplistic. You could basically be buying revenue, while the economics, the underlying economics of the business don’t work. You’re spending a lot of advertising money to buy customers when really those customers are not profitable customers.

I think what you want to do first is lead with the product. And that could mean many different things on a micro level. It could be supported by advertising, but it could also mean just that 1st entrepreneur, and his colleague or her colleague knocking on that 1st door and selling and getting that cash in and then seeing that and then basically, in the chemical equation that is commerce, advertising becomes a catalyst. It’s not the core, it’s not a core reactant in the equation. It’s something that accelerates. The selling of the product versus being like a core reactant.

Aniekeme Umoh:

You’re showing your engineering roots right now.

Sim Shagaya:

I’m geeking out too much. So that’s kind of how I think about it. But you do need to do it, and there are different techniques to it. Are you selling to businesses? Are you selling to individuals? There are some products that sell to both. There are some products that are completely immune to advertising. It’s instead about reaching communities. Like in our case, you know, with selling classboard you do a bunch of billboards and things like that. It’s great for brand building, but what we really need to do is get to communities of Teachers and schools. It’s a high touch, high involvement product. So what you want to do is to demonstrate it. So the challenge that my colleagues and myself have at uLesson is how do we get this product either in front of the decision maker that’s buying this Classboard or getting that decision maker to our office somehow to experience it. And, so that’s the primary challenge versus, say, you’re selling a consumer brand like toothpaste that requires… I’m being simplistic, and we could talk about marketing the whole day. But, you know, 1 big, bifurcation, one big, separation is, are you selling to businesses? Are you selling to individuals? Is this high touch? Is this highly experiential?  If I want to buy that Tesla I talked about before, I want to get in the cockpit. I wanna feel it. I wanna smell it. I want to maybe test drive it. So a lot of these things will drive your marketing strategy.

Is this something that I can sell door to door? Is this something I can sell over? How is it fulfilled? And, again, some of these components, you will iterate as you go to market. So, you know, it’s why often, savvy investors and entrepreneurs will talk about going to market. Now you go to market strategy, now you’ve built your product. You go to the market. And I love that term. It literally, like in my mind, hearkens back to, like market day In, like, an Achebe book or something, and you have to take your wares to the market. And go and sell it and do whatever you have to do to sell it and shout loudly and get your product. 

And going to market will basically be a means of deciding what’s the best way to sell it. What’s working? What’s not working? What’s working? Double down on it. What’s not working? Kill it quickly. And the other thing I’ll mention is as the business scales, as your numbers increase, you will find that your go to market will change. 

Aniekeme Umoh:

Okay. Trying to decide which direction to take this. I wanna stay in marketing a little bit for one more question around branding. We know the effectiveness you talked about Tesla. Like that is a well branded, really good product. I’m curious if you have an unpopular opinion About branding that you could share. Oh. Any hot take?

Sim Shagaya:

An unpopular opinion about branding. Not Really.  I mean, I’m selling hell about the value of the brand and I probably have friends that work in this sector, so I don’t know how this is gonna go. But I’m cynical about when the value of a brand vastly exceeds the intrinsic value of the product. So you will see, if you wanna go buy a luxury brand today, like you’re a big investor, you want to go buy Gucci. You will find that a lot of the value of the business. It is the brand.

I don’t ascribe a lot of value to things like that from the point of view of goodwill. I’m a very productive Person and I don’t think that it’s mutually exclusive from having a really good brand. You can create products that are incredibly just appealing and easy to use and make your life better and still have incredible brand value. A great example is Apple. Those are just amazing and yet there’s brand value there, but I don’t feel like the brand value exceeds the product.

I feel like, for instance, if somebody came up with a phone today that was more usable and could compose emails for me, and I didn’t have to do anything. I could just move from Apple, but the functionality itself is so strong. So I don’t know if my friends in luxury goods would agree with what I’m saying right now. But yeah.

Aniekeme Umoh:

That’s funny. Okay, so you’ve executed, and now you’re scaling and growing. Right? Do you think that businesses have expiration dates? And if so, does that mean something about the business, or can a business continue to scale and grow to, like, infinity, quote unquote?

Sim Shagaya:

Oh, no I don’t think so. I think businesses are subjected to the same, physical laws that we all are. Right? We as human beings, as animals, stars in the sky, everything has its time and then fades away. It seems like that time horizon is even shortening. When I was young, I experienced brands that were 100 years old. But it feels like the lifespan of businesses now is even getting shorter. So much so that I think if you have a brand or you have a business that survived 30 years, I think you’ve had a good run these days. For me, personally, that doesn’t take away from my aspiration that I would love for this particular business we’re working on, this group and its 2 divisions, and to be around for a long time. I think the scope of what the work we have to do, and it’s it’s huge, and it’s gonna take so much time. And I hope I’m, like, a really old man with a walking stick, and I’m like, just barely cognitively there and still seeing the brand on TV whatever it is we’re watching at that point. So I think that’s one of the things that drew me to this. I think there are business models that last a long time. Shell has been around for a long time. So I hope it’s one of those brands. But naturally, yes, businesses have a lifespan.

Aniekeme Umoh:

What advice would you give to entrepreneurs who are looking to scale their operations after establishing a solid foundation for the business.

Sim Shagaya:

Yeah. I think this is where you get into the realm of team. That is where it becomes all about your team. Your limit is hard, it’s hard set by the people that are around you and what it takes and this is where also just personally, individually, it calls for a level of growth that will surprise the entrepreneur and never stops. I feel like even now, I’m still learning things. Like, even in the past, I’ve learned some profound things about being an entrepreneur over the past even 3 months and I hope we get the opportunity to talk about them, but really deep things. And so to build you have to build teams. As the business starts to scale, then functions start to crystallize.

In the beginning, the functions are the same 3, 4, 5 people are doing everything and then specialization is like an embryo in the womb of a woman. As the embryo develops, then it’s all sort of these all the cells look the same in the 1st few weeks, I guess. And then as you go on a heart forms and then nervous system forms, and all of these things form and specialize. So the same thing in the business. After a while, marketing forms, and then you need finance, and then you need sales and you need a salesperson and you need customer service. You gotta take care of your customers. And so you have to figure out how to allocate that’s the other thing as you scale. So you’re getting resources coming in whether from investors or customers. Resources are coming in in the form of cash inflow. And you gotta take that cash and then start allocating to all these special specializations and finding people that are better than you in all of these things.

There may be a specialization area that you continue to remain kind of the domain expert on. That happens often. But generally speaking, you will find the best marketer you can afford. And Many times, it’s not money that convinces these people to join you. It’s the dream you’re selling. You try to find the best this and the best that. You put them together, and you build this team. So the team and I think resource allocation starts becoming more important because it’s that team that will then tell you which direction you should go. You also generally want to find people. The ideal leader of a functional area should be somebody who has experienced The scaling of a business in that functional area previously. So maybe they’re coming in now to be a manager or a VP or whatever title. But maybe in a previous business, they were a  junior person but they experienced what it meant to go from 5 customers to 1,000.

And so you want that knowledge and so you try and go out there and try and find these people and convince them and systematically Try and bring them on board. I have 1 pharmacy in Karu in the FCT, and now I’m trying to go from 1 pharmacy. I want to build a chain of pharmacies, which is an incredibly difficult thing to do, to go from 1 to 5, the complexity. Now you need to start looking somewhere at those supply chains. Now you need to look for a warehouse expert, and that person will tell you, okay. 1 location is in Asokoro and one is to run 1 here’s the ideal place, and rents are cheaper here and they will have a knowledge that you just don’t have.

Aniekeme Umoh:

Yeah. You know talking about teams when you’re expanding people in general, they become wildcards. Right? Yes. How do you foster a team culture that aligns with the vision and, for the most part, kind of ensures the continued success of the venture. What are some key things that an entrepreneur should be looking at when they’re thinking about that?

Sim Shagaya:

So this is kind of we’re now straying into the realm of the things I’ve learned over the past 3 months. There’s some of the things you can do, like, we’re doing now at  uLesson. So I think, like, 2 or 3 years ago, I started taking culture seriously. I  read a bunch of books that kind of really convince me of some of the great companies, those companies that have that longevity beyond the 30 year average we talked about before.

What you find is that underpinning those companies It’s not, their factories or, their processes or any of those things. It’s their culture. It’s culture that will allow you to leap from one opportunity to another opportunity. It’s trite. One example that people often talk about is Nokia. Nokia, I believe, started off making rope rubber boots.

Aniekeme Umoh:

Really?

Sim Shagaya:

Yeah. And then they jumped from that to something else to something else. Next thing you know, they’re making phones. And the and the thing that underpins the innovation, and that’s what the team was the team, was the culture, was what underpinned the ability to jump from thing to thing. When I look at uLesson, all kinds of technologies are going to come over the next 20 years, 10 years even. We are now in an age where creating media has gotten relatively cheaper, and then generative AI is coming and virtual reality and immersive technologies are coming. And if you don’t have the culture to kind of, to drive the ship. This is a big topic. To drive the ship from one thing to the other, then you find that it’s possible that you dominate 1 chapter.

But then in the next, you can’t make the beat. And so some of the features that you need that I found that allow you to jump from one thing to the other. It’s not too much our values. Our values at uLesson is we strive to be really honest. We are empathetic, meaning we feel for each other as colleagues, but also the customer. And we are innovative.

But it’s not that those are the values. I think the important thing there is a culture of honesty. So openness, willingness to challenge each other. To have debates, and to not be dictatorial at all. But instead, be open. One of the biggest things that will pollute, and poison culture is politics. So we try very hard to keep that out of the system, but all of these things together. So, I mean, it manifests in plaques. Those of you that are in this room physically, you would have seen walking in here, you’d see our values on the walls, and this is who we are. And there’s this thing we started doing recently where before meetings, we actually recite our purpose and our values. Which is still awkward, but I’m getting used to it.

And I think it’s a good thing. But, it has to go deeper than that. I think the leadership, the team, these values have to be sacrosanct. They are like, I don’t wanna make the comparison. They’re almost like a holy book. These are the things that don’t change no matter what the technology is, no matter what happens, these are the things that don’t change. And that guides all of your decision making. It’s really, really important.

Aniekeme Umoh:

Yeah. Alright. Well, we’ve almost wrapped up on the questions that I have for you, and we’ll go to the questions for the audience. You tweeted something recently, and I would love to see if you can give us the exclusive of it. You had written that the hardest part of building in your part of the world is not the absence of infrastructure or the size of the market? But then you didn’t give an answer, so maybe you can give it to us here.

Sim Shagaya:

Thanks Aniekeme. So I feel like we talk often about how people who build businesses in our part of the world are subject to, like, infrastructural deficits. Right now, you can hear in the background the home of a generator. And I feel like  I can generally deal with that. And then there’s the addressable markets, which largely is driven by the fact that our people have very low Per capita income. So even though, you know, 200,000,000 people on paper looks fantastic, but you find that very few of us have more than the equivalent of $1,000 in the bank account. And those create down challenges. And I feel like I’m built like a tank. Generally speaking…

Aniekeme Umoh:

What does I mean?

Speaker B:

I’m pretty resilient in the face of things like that, of infrastructural challenges, I can power through them. But I think the one we don’t talk about often is… how can I put this? So, it’s the challenge of people. And I’m not saying that in any kind of judgmental way. So let me expand on that. Because our economy is not just in Nigeria, but across our continent. But I think Nigeria is even relatively better than large parts of the continent because we’ve been so hobbled and so held back. We don’t have it okay. There are 2 implications of this that make it very hard for entrepreneurs when I talk to my friends. And we don’t talk about these things publicly, but we talk about them to ourselves. There are 2 parts of this that are challenged. One is the unemployment it creates. And then the second is the lack of experience that it creates.

So let me explain. So, the lack of experience means that how many businesses in Nigeria today can we point to that earn over $1,000,000,000 in revenue? There are just not that many. There are just like a handful. There may be 3, 4. How many businesses earn over $100,000,000. It’s a handful. So what that means is that you’ve got this incredible population that is intrinsically very gifted, very dynamic, very energetic, but we haven’t built up the experience In scaling businesses, that institutional knowledge, that collective societal knowledge that Americans, as a prime example, have abundantly, We don’t have.

You could throw a stone in California, and you’d find somebody that has joined a business that has scaled from $1,000,000 to $10,000,000. Right. You just can’t find those people here, and I feel like I was ignorant of that for a very long time. No. Well, academically I knew it, but I didn’t understand the implications of it.

And so what that means is that when you’re trying to build a team of people, You basically have to teach each other. So that whole Silicon Valley notion of higher fast, higher fast doesn’t really apply. And that’s something I learned from a very fine gentleman who recently joined us, his sitting here, Dipo, who joined as our head of people recently. And he said something to me even just a few days ago. We’ve been it’s a conversation that has been rolling for a few months, but he said nobody is ready-made. Yeah. Of course, there are some individuals that will be sufficiently deficient in technical skill and maybe deficient in your values, that you can’t do anything about. But what I’m finding is the same way that I learned from Deepa is the same way we now have to teach each other a new lesson. So I’m finding that my role, as a CEO and I didn’t really think about this before, but it’s something I’m trying to do with which is new and other is this role of, like, coaching each other and being more patient and coaching and developing each other because you’ve had experience even in businesses that have scaled. So relatively speaking, you’re better than most. And so that in addition to the Nigerian entrepreneur having to deal with deficiencies in electricity, infrastructural deficiencies, you now take on this additional role of a coach where both Elon Musk and Elon Musk, both of us are reading his biography right now. It’s a great book by Walter Isaacson. You can see that nowhere in that book was he ascribed that role of a coach? No. He just doesn’t, he won’t even have time.

In fact, often you talk about, do this or accept your resignation and so that leads me to the 2nd point is that we we really need to kind of make the tough decisions to get this country going because unemployment here so if you look in the United States, youth unemployment well, unemployment broadly is about 3%. So even in the midst of the economy having its 3% and people are complaining about the economy, your term unemployment here is as high as 50. I’ve heard I’ve seen some estimates of 60% unemployment.

So what does that mean? It creates a really tough context because you’re not balancing the needs of your business as you’re an entrepreneur here. You’re trying to scale the business. You’re trying to find leaders to fill out those specialized functional areas, but then maybe some person is not working. And so then you’re trying to coach, and it’s not working. And so it’s very, very tough. This is so that’s what I mean by I’m resilient, but in this area, I find that I struggle because on the one hand, you want to see the business perform, but you know that if you let that person go because unemployment is so high, You’re subjecting them to trauma and this is a great tension. And it’s only Something that I learned in the later years of my entrepreneurship. So these challenges we’re creating up for ourselves as a society of Nigerians, there are many levels. It’s not just physical infrastructure.

Let’s take the geography of California, and let’s take the functional Area of a developer and engineer. If you are laid off by, say, Meta in California within the week get hired by Google. But here, there is a context where there’s somebody with low income. Maybe he’s minimum wage. He works again at that pharmacy or she works at that Pharmacy, you let her go because of some technical efficiency or cultural misfit. You could argue that there are contexts where it’s a death sentence. So if there’s one thing actually that has made me sometimes think, man, I don’t think I wanna do this again, it’s this challenge. It’s this tension between you wanting the business to perform, but at the same time, you don’t want to traumatize people. It’s a very, very difficult thing to balance, and it cuts both ways, for the person that you have to find and then for yourself. So your challenge is you have a limited pool of talents to find.

There are people that are eager, that are passionate, that want to do the work, And, maybe we can upscale each other and coach each other and be more patient with each other. But the pool is limited compared to we have to admit that. And then at the same time, you’ve got this unemployment outside. So we’ve got a lot of work to do as a society.

Aniekeme Umoh:

I think your response to it really showcases this one of our company values, which is empathy.

Sim Shagaya:

Yeah.

Aniekeme Umoh:

And it’s definitely layers and levels that I don’t think many of us had, like, thought about. So Thank you for sharing that. We’re going to go into questions now from the audience, and then we’ll also take questions from those who are joining us online. So do we have any questions here? 

Question from the audience (AY): Hi Sim. Thank you for the discussion. I really learnt a lot. Asides all you’ve mentioned, are there specific things you identified that are important things to consider when starting a business?

Sim Shagaya:

So AY is one of my really good friends. So I’m gonna answer this the best way I can. There’s a lot of opportunities here. There are a lot of things that have not been done here that have been already done in other markets, which, by the way, is a perfectly acceptable form of innovation. Taking business models that have been from another and then applying them to your own geography, and then localizing them to the degree you can. It’s actually one of the definitions of innovation. But I think one of the things I’ve learned is that, well, first of all, I think while finding this out now, The demographics, the population does not indicate the actual addressable market. There’s a big difference between the 2. Huge difference between the 2. That’s the first thing. And the second thing is that so all of this brand newness, this virgin market that we all have, and there’s all of, comes at a price. There’s always something on the other side of the coin. Right? And those are the things I’ve talked about: how do you build teams? How do you maintain high standards and high quality? And again, some of these things, the Low quality, you see the lack of empathy for customers, even some of the, moral decay. This is not us intrinsically. I feel like the Nigeria I saw growing up in the eighties is very different from now. Some of this is a consequence. So you and I find that you have to not take what you see in other markets and jurisdictions as applicable here. There’s more opportunity, But there’s also, in some ways, more work.

You hear your VCs who like us, we have some really intelligent VCs who really care about us and care about the business, and you’ve given a lot of advice, very well intentioned advice. But I’ve often found that a lot of that advice just doesn’t apply, and you have to kind of just listen to it, you know, and smile and nod and then still apply some judgment as to what you’re going to use on what you’re not going to use. So a lot of it just doesn’t apply. The other thing I think is that, and this is really strange. The customer service, I kinda touched on this early. The ability to empathize with the customer. So quality from a customer service point of view is a bonafide advantage here where it’s not in many other markets.

And maybe it’s caught by all just drunk on crude oil.  Like, it just creates this behavior where you don’t care about the customer as much. And I feel like that’s pervaded our society almost completely. And if you’re that entity, you could literally be doing the same thing someone else is doing, but you’re just more responsive. And I don’t see how people don’t see this. Like, there’s this thing we have at MIVA. One of the things we measure is how long it takes for us to pick up the phone. When a customer phones, it’s one of our North Star metrics here. At uLesson, I think their measure is the phone shouldn’t ring more than 3 times, and a customer’s problem shouldn’t be resolved longer than 24 hours. You should resolve the problem. And at MIVA, I think our response time is 1 minute. So these are these I think we’ve gotten it down to that. 

Aniekeme Umoh:

1 to 2 minutes.

Sim Shagaya:

Yeah. We’regoing in one direction but you get the point. Right? So, I mean, this can be really powerful, that differentiates us in the market, just because of the direction the society has gone over the past 30, 40, 40 years. 

Aniekeme Umoh:

Right. Right.

Question from the audience:

After building a good Minimum Viable Product, how do you market the product again to the extent that you will be able to scale without getting external funding?

Sim Shagaya:

I think that’s tough. So the scenario you’ve hinted at is the classic for where you want to get money. The assumption I think you are making here is that so there are businesses that if you may not be making a lot of profit margin whether on the gross margin level or net margin level. Mhmm. But when they scale, then the margin appears. I assume that’s what you’re talking about. So that company that went to YC and got funding and then scaled, it’s probably started enjoying better margins than you.

So in some ways, you’ve answered the question, which is that they went to raise money. You have to be very honest with yourself and understand the business enough to say, okay. I’m doing this. It’s working. I’m seeing margins, but the capital accumulation, the pace I can accumulate money to be able to get this thing to a point where it starts to take off, it’s too slow, and somebody can come and take this opportunity. But if I get money, I can improve the margins. That right there is an indication that you should go and find somebody to invest in your business. You should go and try and get money somehow or somewhere.

But you have to be honest with yourself. It’s not that you’re gonna raise money and the margin profile of the business doesn’t change. If it’s going to be the same margin profile, then you might as well just keep going. And let that person go to YC and come and still come back and meet you where you are. But if it’s that, you’re going to get some kind of structural advantage, capital can give advantage, and that can improve your margin profile where maybe before your gross margin was 6%, but you raise capital and that gross margin improves to 15, then I would say you can raise money as soon as you can. But you need to understand that very clearly in your mind.

Question from the audience:

Good afternoon. So I have 3 questions. 1st question is you talked about how businesses have an expiry date. So I also wanted to ask the ideas you have for these businesses, do they have the expiry date? Do they have a time frame in which they must be actualized or they are just there. Second one is just before you scale, how do you deal with the frustration, especially financial frustration? Have you ever experienced that? How did you handle it? My third question, what is the line between collaboration and competition? Where do you draw the line?

Sim Shagaya:

So expiration dates of an idea, frustration, and the  collaboration/competition. Am I correct? Remind me.

Aniekeme Umoh:

Go ahead. I’ll remind you. Don’t worry.

Sim Shagaya:

So the idea itself, not the business, you’re talking about the idea itself. Oh, no. I just proceed on the basis that I think you should proceed rather on the basis that somebody else has thought about this thing and just move Fast. Like speed is something that I think is also a very powerful advantage. It’s something we do again.

In fact, one of the biggest things I try to do here is to just sustain a sense of urgency and speed because as you get older, like, institutional, there is a pushback that the institution and it’s not that anybody’s doing this individually. It’s just that decision making, maybe has to pass through a few more links in the network. There’s a bit more, you need to discuss things a bit more, and that also produces good outcomes. But, you need to sustain speed. You need to just go fast and just assume somebody else is doing it. So, of course, the time limit for Some ideas is when somebody else has done it then you need to just, you know, back out of it. It depends on the idea and it also depends on the team.

Put it like this. If the right team had executed on this tertiary institution that we’re building. And I was aware enough of this team, and I did my intel then I sent people out and said, find out who these people are. There is a universe where I say no. Okay. This is gone. Okay. I’m not gonna do this.

But, obviously, there’s an ODL operating out there right now. Well, there was when we came into the market. Open distance learning is an ODL, but we still went for it. So it depends on the context. I have a lot of respect for National Open University. They occupy a space in our society that is critical. They do things that I respect. There are prisoners in the Nigerian prison system that attend NOUN.

Aniekeme Umoh:

Yes. They are.

Sim Shagaya:

Yeah. These are very valuable things that they do. I give them all the respect possible, but I still felt like there was a space for a private ordeal. If there was another private ordeal is what I’m trying to get.

So, the second question, frustration. I mean, I think the most not really in terms of raising money. I bet a lot of my own money on things, and I’ve lost a lot. Sometimes I wonder whether my returns would be better just in the stock market or something. But, it’s not about putting money in. I think the frustration is when you put something out there and it’s your business. It’s your idea. It’s your sweat. You’ve sold this idea to people. Maybe your friends have even put money in, which has happened a couple of times, and then you launch it to the public, and then nobody comes. That happened with a business called In iNollywood. This goes back to timing; which was a terrible name.

Aniekeme Umoh:

What was this thing?

Sim Shagaya:

It was called inollywood.com . It was in 2004 I had this idea. So I was going to digitize all these Nollywood movies, put them online, and then people could pay and watch Nigerian movies.

Aniekeme Umoh:

So it was like Irokotv before… ?

Sim Shagaya:

It was called inollywood.com

Before Iroko. Before Irokotv. And so a friend of mine, mentor of mine gave me $100,000, and I think I put in maybe $10,000, he took a minority position. A guy called Hakeem Belo-Osagie put in a 100k. And not only that, he believed so strongly in this thing, But our timing was so off. So I had this idea that how I was going to acquire customers: I’ll go to NTA and digitize all the old village headmasters and Samaja and put all of these things online and then people would come and watch or get those nostalgia and then convert to paying customers, which was also very silly. And then Keem actually sort of took me to NTA, introduced me to this guy called Peter Eagle. Sat there with me, walked me through NTA, went physically with me to the meetings, got me rights to NTA’s library. I signed the digital rights to NTA. I think they’re in perpetuity. I think I still own those rights, to be honest. And then went into the library, digitized the stuff, put it online. But at the end, we put it on, and the timing was wrong. Most Nigerians were still on 2g, who had cards back then.  I just didn’t think about the context of the things we talked about earlier. And so, you know, I  remember having to go and tell Hakeem that’s you know, I think it’s time we shut this thing down, and it was that dreadful like feeling. I think it maybe took me, like, a week. I finally had the courage to go and tell him that this thing is not going to work. And surprisingly, he just kind of was like, ‘okay, no problem’. Let’s move on. So there’s that.

And then your 3rd question, the line between competition and collaboration.

Aniekeme Umoh:

Yes.

Sim Shagaya:

I feel like a lot of that is driven by culture, by people. What are you able to find, like, a zone of agreement. I think it’s also driven by some wisdom and maturity. Like, I do believe more in collaboration now. I think when I was younger, in my early thirties, I felt I was just like war. There was a world where Konga and Jumia were supposed to be 1 company.

And our investors tried to make us very early in the 1st year of that business, but I think I was just way too hot headed back then. And, to be fair, I went to go meet the founder or the ultimate owners of this business, And we talked about it, and I found the approach a bit condescending. AnDI got up at the end, they’re trying to convince me to do this, and I was kind of resistant to it. And I got up, and I think he resented the fact that I was resistant And so he didn’t shake. I put my hand up, and he didn’t shake my hand.  And I just thought, man, what an arrogant you know? And if he had shaken my hand,I  would have yeah. Very likely. 

But I do think that there’s space for it. Right now, we, you know, we collaborate with other tertiary institutions a lot at MIVA, and it’s something I’m very proud of. And education is one of those industries where you can’t do everything.

There are so many facets even to the running of the primary school. Is it learning management systems? There’s curriculum stuff. There’s all kinds of functions that we will likely expand and grow through acquisition and to collaborate. I don’t think we’ll be able to build everything. As time goes on how do you balance values against technology? I don’t see it as a balancing act, but I see that I think they’re exclusive to one another. In fact, your values are what help you survive through whatever seasons come and go, whatever leadership comes and go, I’m likely not going to be, at least in a direct sense, leading this for a long time in the other things I want to do. But if those values are sufficiently in place, those will guide the next generation of leaders, who should ideally create even more wealth than I created and in the process themselves get wealthy. But, No. I don’t see any kind of conflict between the 2. It’s why Nokia again went from rubber boots to phones. It’s why NASPA…Have you heard of NASPA? Who’s heard of? So you know NASPA’s owns DSTV and, Nasper’s, well, I think they’ve responded off now. Who knows Tencent? They’re a Chinese company. So they’re a large shareholder in Tencent. When Nasbah started at the turn of 20th century with a newspaper in Cape Town, and it did actually, I think it was called, or something. And the newspaper generated a lot of cash flow and was old and lasted on the first team of managers of that newspaper. And the a whole new manager came back from Columbia Business School, which is where he went, and he joined. First, he aligned with the values of they were still sufficiently innovative. And he told the company, I want to take you into this direction of pay television because he had seen it in New York. And so, South Africa actually became one of the 1st markets with pay TV because in the world, because of Nazpolis. And so that’s how multichoice was born. And then those same principles then guided them to China where they invested in this little business called Tencent, which is perhaps some would say the best investment in the history of humanity. Right? Although they did make some mistakes also. You know, Nasco’s owned a small stake in a company. Not a small, significant stake in a company we now know called MTN.

Aniekeme Umoh:

Really?

Sim Shagaya:

Yes. And then I think about when MTN wanted to go to Nigeria. They said no. They if you’re going to Nigeria, we’re not going and they sold their stake and maybe they got misaligned with their values a bit. I don’t know what their values are explicitly. But still an amazing entity, that has gone from newspapers to Super sports, a 100 years later. And, clearly, the people that started it are gone, and now a business WhatsApp is inspired by Tencent. So I don’t see any conflict. Instead I see the values as the way you sustain, over time. Business wise? Yeah.

Business wise. Not personally. Obviously. What should I focus on? I’ll I guess Wow. maybe I would have advised myself to stay in large tech for longer than, start trying to start businesses right away. Because at that age, I was already trying. And I was just way like, Nigeria was just way it was way early. So maybe I should have stayed at Google or I should have joined Facebook back then, or something. That would have been the advice, and then come a bit. I feel like now is the time. So in other words, some of us from, like, the 1st class of Tech entrepreneurs, Jason, myself, a few of these people. Even we didn’t see the full fruition of this. Yes. It’s this cohort, of people, people like, the Paystack founders and the founders and the Fintech guys and even outside of Fintech, like, Nigeria is now starting to blossom. There was still some exuberance, and overfunding and some problems, but We have a real ecosystem now.

And, you know, back in 2005, 2006, I was just running around. It’s a lot of energy. Maybe I should have saved some of that energy and, and stayed in corporate for longer.

Aniekeme Umoh:

So, Tracy, we have a question. I’d like to get to this question from the online audience. And it’s how do you market and convince customers about a product not yet produced? So it’s that crowdfunding, Kickstarter You had talked about earlier?

Sim Shagaya:

No. Even crowdfunding and Kickstarter, generally, you have a prototype. You should have a prototype of some kind. That’s good to say that there aren’t people that are skilled at selling something that is not there; I don’t know if I have that skill, I don’t have that, some people do. They sell something that is not there. I’m not sure I have that talent, and I’m not sure you should be doing the strategy. 

Aniekeme Umoh:

Oh, so the answer is don’t do that?

Sim Shagaya:

Yeah. I don’t know. I can’t think of a context in which it’s moral to do that. Maybe there is. II 

Aniekeme Umoh:

I know some people go for Kickstarter. There are some people who will go crowdfund for an idea, and venture capitalists who give you money. For an idea. So?

Sim Shagaya:

It happens.  But generally, let’s be honest, what you’re doing at that point, Aniekeme, is you’re not funding the idea, you’re funding the person. That’s really what you’re doing. You’re buying a stake in the person’s time. You’re assuming, this person is going to go and do something. I don’t know what they’re going to do. It’s probably gonna be good.

Aniekeme Umoh:

Yeah. Okay.

Question from the audience (Miva Learner):

How do you convince an investor to invest in your business? How would you handle investors leaving? Why did the tuition fee go up?.

Sim Shagaya:

Oh, yeah, we’re very sensitive to that. Very, very sensitive. And in fact, in that part of that particular case, we’re probably going to make some changes and some announcements on that on Monday or today. One opinion is very hard to bank on. But if you are getting the same opinion from a large number of people, especially if those people are unconnected, they are not talking to each other. So I walk into a different household, and they tell me something. Walk into this household, they’re telling me the same thing. Then, you know, Vox populi –  the voice of man is the voice of God. You need to start paying attention to that, especially, if you feel like you can still sustainably serve that business. What we optimize for at MIVA and even at uLesson is to make education accessible to as many people as we can. That’s what we’re optimizing for. We believe that the money will follow. So we’re not optimizing for money at all, which is why we started out with the fees we started out with. If we could make it lower, we would make it lower. And so we’re trying to figure out how to do that right now. But it’s also important that the enterprise be sustainable – that it sustain itself.  And then maybe as it scales, there might be even more room for reduction, or maybe we can find ways to use technology to drive the unit cost, The cost of serving a customer down. So there’s that. 

Now to your first question of how do you convince an investor. There is a very powerful tool. you want to do your unit analysis. Take 1 customer, and you want to be very disciplined, very honest with yourself of what You will make from that customer and what it costs to serve that customer. Now if I, as an investor, see that you can profitably, first of all, acquire that customer and serve that customer and still generate cash flow, then it just means that the funds I’m investing would just allow you to do more.

But if on a unit basis, we’re not being honest with ourselves. And on a unit basis, you’re losing money, and there’s no clear path. Because like the gentleman earlier was saying, it’s possible you’re losing today, but there is a path to when you can start making. And you know there’s no clear path to where you can start making margin on that customer, then you should leave it alone. And I feel because capital has been so cheap for the past 10, 15 years, money has been so cheap; I know we’re sitting here in Nigeria saying, what the hell is he talking about? But on a global level, if you look at kind of United States macroeconomics, there’s been interest rates that have been so low. That venture capitalists have been flooded with so much money that decisions have been made to fund businesses that are not good on a unit basis. We’ve seen a lot of those kinds of things, which is why you see a business like it’s worth $5,000,000,0 literally 12 months later, the business is bankrupt. Like that should not be the case. Somebody at some point was not honest themselves, the entrepreneur or the investor.

So I think it even starts with the entrepreneur. You must be honest with yourself, because you will meet cheap capital. It will happen again. And so you have to be able to back out of that. Now In terms of investors leaving you, I’m not sure what you’re talking about. Maybe there is this thing I’ve seen, which is a bit unhealthy in our funding environment, where an investor will say I’ve invested N1,000,000 in your business and I’ll only give you 100,000 naira now, but when you hit this milestone, I’ll give you another 100,000. But then the press release is done and, you know, it says, lady x y z raised a 1,000,000 naira, but the truth is it’s not in the bank. Maybe that’s what you’re referring to. So at any point, they could just walk away.

If an investor is committing to your business, I would draw down the cash. I don’t I don’t buy into this whole staggered drawdown, partial drawdown kind of thing. If all you’re giving is a 100,000, that’s great. That’s awesome. I know that’s what’s in the bank, and I will work with the 100,000, but not bank on what’s happening in the future.

Aniekeme Umoh:

Thank you, Samehoutik. One more question from the audience and a question from our VC, and then we’ll wrap up. 

Question from the audience (Miva Learner):

So if you could change something about the Nigerian education system currently, what would that be?.

Sim Shagaya:

Yes. That’s a fantastic question. Thank you. I don’t have an answer because I’ve been thinking about it for the past few months. I would I would address K-12, primary secondary school, and I would change the statutory requirements, even though it’s not a president, it’s this this K12 is, regulated by the states, Not the federal government, but I would remove the requirements and restrictions around what it takes to start a primary or secondary school. I would make it so that a community, whether they are a church group or mosque group or a traditional group, an ethnic group, A neighborhood group of mothers or fathers can start a school and, using technology, curriculum, and resources can be delivered into, into The corner of some street. We have 900 and 23,000 classrooms in Nigeria. Those are the classrooms that classboard, our new product, is ultimately going to target.

It’s a huge opportunity. You would think that’s big. But that 923,000 only represent 40% of the children in Nigeria. 60% of our kids are out of school. So if we’re going to address those 60%, what sort of capital would it require from a private actor, speak less of a Public actor. with all of the inefficiencies that are inherent in even the most efficient governance, alright, What kind of capital do you need to harness to address that 60%? It’s an untold amount of money. So we have to rethink how we’re going to educate these children, especially because it’s a very easy calculation. First of all, we are showing a few lessons that the efficacy of technology mediated instruction is at least on par and in many instances, superior to the traditional way. And the alternative is you have nothing.

My vision for the future is  Classboard; when we bring it to market it  is going to be pre recorded lessons and assessments and resources for a teacher. And we’re going to deliver that to a classroom for a cost that is at least 50% of a competing solution out there in the market right now, it’s exciting. The next step for Classboard is we want to be able to stream using 5g, and doesn’t even adequately capture it. We want to be able to push in a physics teacher to a school that does not have a physics teacher. And so a kid who is in that class can raise their hand, and that physics teacher, wherever they are teaching from, can see that Dami raised his hand in Badagri Secondary School. What’s your question here? And he can answer that question and talk with that kid. That is the next chapter in our minds of where we want to go. And we want to be able to pull this class board.

So if I’m talking to a state governor or the president of the federation today, we need the regulatory And the statutory context to allow any group of women in any village to come together and say we want to create a school for our kids between the ages of 12 and 15. We’re gonna get a passport, the curriculum, the timetable, very much like how you go on DSTV and you change and you see a timetable of football being played now. This is going to be played. This is the timetable for junior secondary school. And we are provisioning this, and it’s interactive. And the child’s questions can be answered, and we can take attendance, and we can know whether he’s in class. And we can know all of those things and stream it to the regulatory authority. But we have to do away with some of these requirements that don’t have anything to do with anything.

How many square meters of land is the school on? Does the school have a clinic or not? Even the core primary care system of our country, let’s be honest, how many primary care clinics are there? So how can it be a statutory requirement that School must have a clinic? So we have this multitude of problems. Let’s face them, and let’s stop pretending like we are the same, macroeconomic points that Canada or Norway or Denmark or Japanese, we’re just not at the same place. It doesn’t mean we can’t get there very quickly. But for us to get there, we have to rethink it. The 1st schools in the United States were built in such a way that the child’s commute to school in many instances was not more than 200 meters. They just walked to school. Now you have imposed this cost because we are trying to jump ahead and not about things properly. The child lives in Yaba inn Sabo and their school is in Alimosho and so just think about the cumulative cost of transportation. If you gather all the cost of transport for all the families, private and public, and put it together, it’s a huge societal cost and inefficiency. So that’s how I think about it. Bring the school smaller, make the school smaller. Bring them closer to the communities. Fragment them, and they use technology to go into the school. That is what I would advocate. And whatever the regulations are that would impede that vision, smaller, more, closer. Whatever those regulations are, get the government. That’s how we think about it.

Aniekeme Umoh:

Wow. Thank you. So we have a question.

Prof. Tayo

Thank you, Sim. It’s been a wonderful session. I picked something you were talking about earlier. That is the timing of the business. And I look at it, like, what influences that is actually government policies. Government policy influences when it gets suitable. Just like 5g. If the government did not have a policy for 5g, it would have been difficult to come in.

What I want to ask is that, as a visionary leader and some people who are already established, entrepreneurs, innovators, what are you doing together to influence the government in terms of policy so that it can be better, we can innovate more.

Sim Shagaya:

Thanks, Professor Tayo. And I I appreciate the question. And I also appreciate your effort as sort of driving us to innovation. You’ve constantly been one of those forces many of us have, actually. We’re just trying to push the edge a bit. One of the advantages of the group is that we are based in Abuja, and so we’re very close to the government. And when, and I made that decision to move from Joss to Abuja, for the 1st year or so, we’re wondering, did we know? I mean, I know I did, And it was a sensation where I’m just going to Lagos or something, which is a commercial note center. But like you said, government policy drives a lot.

But in the past I have to say I’ve actually been impressed by how much relevant agencies have started to engage with us. We want more engagement, of course, and we want our inputs. Of course, not everything we’ll say will be taken lock, stock, and barrel like this Vision I painted just now. I can’t imagine it will happen like that. But the government is listening more and more. In the past, we’ve been privileged to host UNAT.

Yes. The Universal Basic Education Commission, the ministry of education, the permanent secretary of that ministry, outgoing permanent secretary of this. The National University Commission, of course, in the process of licensing has been here. Agencies that have to do with development of certain regions of this country I’ve been here. We’ve engaged with members of the secretariat of the federal capital territory. They are looking to do some incredible things with technology. And so if you look at it, actually, and then when I talk or talk to my friends who are private operators in the education space in other countries, Again, like, you know, Norway, Finland.

What I’m finding actually is that in our regulatory bodies, there’s this big perception in our minds, because of the cynicism Nigerians have built up against the government and justifiably so, the cynicism. But I think if you peel back that cynicism, you’ll see that we actually have agencies that are trying to figure this thing out And, actually, I’ve been responsive. The fact that the NUC licensed us, I think, speaks to that. You’re not seeing that happen in many jurisdictions. So, you know, we will continue to engage. We know the government moves at a different pace from private enterprise.

We have many more stakeholders to think about, a much larger population. They have a population to balance So they have to weigh all kinds of things. You know, it’s a bureaucracy ultimately, and we know we know what that word means. The bureaucracy operates the government. So it just moves a bit slower, but we have to keep engaging. But I think the intentions are there, and it’s up to us to keep educating them on what’s possible, kind of pushing them forward.

Aniekeme Umoh:

Alright. Thank you so much, Sim.

Sim Shagaya:

Thank you, Aniekeme. That was easier than I thought.

Aniekeme Umoh:

I don’t know why you thought it would be difficult. Come on. So we’ve taken quite a bit of time. We still have people who have questions, but we know that you’re going to be around for a little bit, so they can pose those questions to you. Before we end, it’s a Saturday. Just to end this on a bit of a lifetime note. If you could partner with any fictional character or celebrity, right, to launch a business, Who would it be, and what kind of venture do you think you would create together?

Sim Shagaya:

Jeez. Who would I partner with, and what kind of business would we create together? Apart from this one, you mean?

Aniekeme Umoh:

Apart from this one.

Sim Shagaya:

This would have to be an individual. I don’t know who it is, but somebody would like deep patience, loads of capital. like loads of capital.

Aniekeme Umoh:

It can be a fictional character too.

Sim Shagaya:

Okay. Yeah. So somebody who’s, like, you know, very patient, deep vision, loads of capital

Aniekeme Umoh:

Iron Man?

Sim Shagaya:

Iron Man, Tony Stark?

Aniekeme Umoh:

Yeah.

Sim Shagaya:

Yeah. So something in the energy space. Either in mobility or energy generation or electric bikes or tricycles or things like that. But those things take a long time. They lose money for 10 years. That’s why I said loads of capital.

I’ll do some cupboards. But, yeah, I don’t know if I have the appetite for, yeah, For another one of these cases. Maybe, yeah, you can, but no longer.

Aniekeme Umoh:

Wow. Actually,

Sim Shagaya:

No. Actually not you. We need you there. 

Aniekeme Umoh:

Alright. Thank you so much again, Sim. This has been wonderful. We would love for our VC to just give a quick vote of thanks, and we’ll close this. So we’ll be around, and we have some snacks for people who are here, in person. Folks joining us online, thank you so much for being a part of this. VC.