#EagleArise: the art of unlocking value (Part 1)

__”Opportunities don’t happen, you create them.”

Twenty years ago, almost to the month, I listed my first company on a stock exchange: Econet Wireless Zimbabwe (EWZ). As I have discussed before, taking a company to a public listing is what many entrepreneurs live for. To us it can be the equivalent of qualifying (as a soccer team) to join a top flight league, or to go to the World Cup Finals. It is pretty special.

I have written about raising money through a stock exchange before, as the ultimate for any entrepreneur. When I listed Econet Wireless Zimbabwe, it was exactly 12 years after I had started the business. It took a lot longer than I had originally hoped, but I faced other challenges which were beyond my control.

At the time of our listing of EWZ in 1998, we went out to raise $10m. Today the company is valued at $3,9bn. We made our millions of shareholders very wealthy along the way, and we are the backbone of the investment of most people’s pensions in Zimbabwe.

Over the years, thanks to the technology revolution I have been telling you about, we have hugely expanded the range of products and services we are able to offer to our customers beyond our mobile phone services.

Whilst times have been tough sometimes (and that’s an understatement) we have learned to “fight in the conditions” and our great teams of#people have developed innovation after innovation, with our #products and #processeswinning a lot of awards along the way.

Now when we and our team at EWZ reflected on what we should do to commemorate this historic event of our 20th anniversary, we decided to do something really audacious…

In a few weeks, (subject to the approval at the EGM), EWZ will “spin out” one of its businesses called Cassava Fintech which is now called Cassava Smartech Zimbabwe (CSZ). This company is currently a subsidiary of Econet Wireless Zimbabwe.

__When this “unbundling” takes place, our digital products and services group, CSZ, will be listed as an independent company on the Zimbabwe Stock Exchange!

Note that we are not going to sell any shares in the company, but rather distribute all the shares directly to the existing shareholders of EWZ for free, as it were!

This means EWZ shareholders will wake up on the listing day owning shares in two independent companies that have nothing to do with each other. As a student of entrepreneurship this should be very interesting to you. Start thinking why we’d do this!

Whilst many people have never heard the name Cassava, they know the business through its brands, many which are household names like EcoCash, EcoSure, EcoFarmer, and Ruzivo. These are products and services used by millions of people every single day.

Some of you may know that Cassava Smartech Zimbabwe is part of a bigger international group we call Cassava Smartech International (CSI) that is already active in 20 other African countries! There is no shareholding relationship between the two, just a management and technical support arrangement.

“Opportunities don’t happen, you create them!” One of you shared this quote in your comments on my last post and that’s exactly right…

This is what my new series is going to be all about. We study to do!

To be continued. . .

by 18 Replies

About Strive Masiyiwa

Strive Masiyiwa is the Founder and Executive Chairman of Econet, a diversified global telecommunications group with operations and investments in over 15 countries. His business interests also include renewable energy, financial services, media and hospitality. Masiyiwa serves on a number of international boards, including Unilever, Rockefeller Foundation, the Council on Foreign Relations’ Global Advisory Board, the Africa Progress Panel, the UN Secretary General's Advisory Board for Sustainable Energy, Morehouse College, Hilton Foundation's Humanitarian Prize Jury and the Kenjin-Tatsujin International Advisory Council. He is one of the founders, with Sir Richard Branson, of the global think tank, the Carbon War Room, and a founding member of the Global Business Coalition on Education. Masiyiwa took over the Chairmanship of the Alliance for a Green Revolution in Africa (AGRA) from Kofi Annan. He is also Chair of the Micronutrient Initiative, a global organization focused on ending child hunger and improving nutrition. In 2012, Masiyiwa was invited by President Obama to address leaders at the Camp David G-8 Summit on how to increase food production and end hunger in parts of Africa. In 2014, Masiyiwa was selected to Fortune Magazine’s list of the “World’s 50 Greatest Leaders”. As a philanthropist, he is a member of the Giving Pledge, and his contributions to education, health and development have been widely recognized. Masiyiwa and his wife finance the Higher Life Foundation, which provides scholarships to over 42,000 African orphans. In 2015, he was the recipient of the International Rescue Committee’s Freedom Award and was presented with a UN Foundation Global Leadership Award for the work of the Africa Against Ebola Solidarity Trust, which he chairs and helped establish to fund the deployment of African healthcare workers to combat the outbreak in West Africa.

18 thoughts on “#EagleArise: the art of unlocking value (Part 1)

  1. Strive Masiyiwa Post author

    Afterthought 2.
    A company like Econet Wireless Zimbabwe has thousands of ordinary people who bought shares over the last 20 years. Many bought at the Initial Public Offering (IPO) whilst some probably bought yesterday. Even more people own shares through their pension funds. Others own shares because their insurance company or mutual fund used their money to buy shares. When our share price goes up those pension funds and insurance funds go up in value. This is what enables these funds to look after pensioners upon retirement.

    Publicly listed companies that perform well are actually protecting the livelihoods and pensions of millions of citizens. Many of our school teachers don’t know this, and so don’t pass on this knowledge to kids. This is not an excuse when you become an adult! Be sure to teach your children about financial literacy and how things like stock markets work, just like you help them with reading and writing. Here’s one website my team found that might be of interest: http://www.themint.org/kids/what-is-the-stock-market.html

    Reply
  2. Strive Masiyiwa Post author

    Afterthought 3.
    I know a guy in China who told me one day: “I’m an early investor in Apple, Facebook, and Google, and I’m still holding.”

    It was my turn to say “Wow!”

    Buying stocks is not gambling or betting unless you do so with little understanding. Everyone in this generation should have stocks. Yes, they go up and down, but you must learn how to “ride the market” like a pro. In America even blue collar workers own shares directly in companies whilst their pension funds are the biggest investors. Now that is something Karl Marx did not imagine… Workers would actually own companies!

    Reply
  3. Strive Masiyiwa Post author

    Makata writes,

    Losing my mom last year traumatized me to the extent that I lost interest in many things and stayed away from social activities. I stopped reading posts and as well stopped reading “Chief” Strive’s posts. But all this while I was away from reading his posts, I knew I was missing a lot – I was missing that “loud voice of move now” each time I read his post.

    So I went back to them last month, I knew exactly where I stopped and started reading all of them, the afterthoughts, comments of fellow entrepreneurs. And today I have finished all those parts I missed. And I tell you what? My head has been boiling, telling me again “move now”. I have something cooking though, but just like “Chief” would always say “shhhh” until it becomes a business. And that day I would be proud to stand before high class of men and women as a chairman of something big coming. And after the meeting I’m headed to SA to see “Chief” in person and thank him for all the free education he’s given me.

    Thank you sir for what you’re doing for all of us.

    My reply,
    My heartfelt condolences.
    May the Lord continue to strengthen you every day.
    You will be a great entrepreneur!

    Reply
  4. Strive Masiyiwa Post author

    Wanderley from Angola writes,

    Dr Strive Masiyiwa I am glad to know that EcoWireless has created solutions to impact farming through technology, that’s part of the 4th revolution and we Africans need to strive on this path. We are an Angolan startup with focus on agribusiness marketplace, we have a very interesting operating model that covers some countries where farmers cannot read, how they can use the technology though? You will also see that one of the major problems developing Africa agribusiness is the logistic chain that is quite complex and ineficiente in several countries, through a consultancy company we accelerate the logistics chain linking the needs with opportunities, the business model uses youth unemployment as target, the objective is to fight the rural exodus considering that 65% of Africans has < than 25 yrs and this is where we want to make difference, we are inter very beginning but Kepya is already attracting the attention of many smallholder farmers, most of them cannot use SMS but the youth people around them can, so they become our agregators, support the farmer and become a self employed person on rural area. Another interesting part is the data mining, through our technology we produce valuable information that is avail to investors and government for smart decisions. I see an opportunity to share this with you and other members of this group as this is a must for Africa, we aim to become the agribusiness Amazon! “Come closer to grow” this is Kepya

    My reply,
    This is excellent well done.
    I hope my Ecofarmer guys find a way to work with you.
    Well done!

    Reply
  5. Strive Masiyiwa Post author

    Afterthought:
    The wealth of the world’s richest people is mostly measured through shares in a public listed company, and not cash or property.

    Jeff Bezos [world’s richest person @ $156bn net worth comes from shares in Amazon, the company he listed.
    It is the same with [99%] billionaires in the world:
    Aliko Dangote’s company is listed on the Nigerian Stock Exchange, that is how we all came to know that he is the richest billionaire in Africa.
    Patrice Motsepe’s company is listed on the Johannesburg Stock Exchange, and that is how the world realized his true worth.

    #. If you are dreaming of becoming a billionaire, then you have to first build a company which can be listed on a recognized Stock Exchange.

    #. If you want to build a company that will one day be worth billions then you must understand how to raise money through a PUBLIC OFFERING of shares [IPO].

    Reply
  6. Strive Masiyiwa Post author

    Emmanuel writes,

    But Mr. Strive, how do you know a good place to buy shares?
    I remember sometime ago in Nigeria, my dad bought some shares and after a year or so, the company closed down with the shares gone.

    What is the ideal criteria a company must possess before buying shares from them?

    My reply,
    My objective on this platform is to mentor entrepreneurs by using examples from my own life and experience.
    I’m not really all that interested in helping you to buy or choose the right company to buy shares.
    I want to encourage you to set up companies that can list on a Stock Exchange in your country, or even Nasdaq.

    So I would rather you ask me questions about how one builds a company which can do an IPO.
    Not enough African entrepreneurs are listing their companies, and this needs to change otherwise those businesses will not become giants like Dangote or Econet.

    If you want to simply buy shares look for a Stock Broker.

    Reply
  7. Strive Masiyiwa Post author

    Jerry Writes,

    Chief, in this post you are encouraging us to build businesses that can be listed on stock markets I’m sure the advantages of listing are that it becomes easy to raise funds for expansion.

    My question is why are most of your businesses not publicly listed? Is it for purposes of maintaining control?

    My reply,

    “My question is why are most of your businesses not publicly listed? Is it for purposes of maintaining control?”

    My answer is that I’m usually able to raise the money I need without going to capital markets.

    Reply
  8. Strive Masiyiwa Post author

    Christian writes,

    Goodmorning Strive sir.. please why not make room for more people to own shares instead of distributing it free which of course is the right of the existing shareholders.
    I would be grateful. I’m ready to buy even if it’s 1% share. It’s enough for me.

    My reply,
    There are two steps to this kind of listing:
    #1. The shares are distributed to shareholders who already have shares in Econet Zimbabwe. Some of these shareholders are international investors from as far afield as United States, France, Australia, Kenya and SA.
    There might even be shareholders from Nigeria.
    #2. Once the shares start trading on the exchange, the existing shareholders will be free to sell to other people. Anyone looking for shares for the first time will be able to approach a Stock Broker, and buy shares through them. Shares are sold or bought every single day.
    When you approach a broker they will usually stipulate a minimum number you can buy. In this case it’s about 100 shares, which means a person would pay about $2500.

    Reply
  9. Strive Masiyiwa Post author

    Adedeji writes,

    All these business terms are strange to my layman brain.

    My reply,
    Don’t let it intimidate you!
    If you have never watched a particular sport, say basketball; what would you do to get to know the rules?
    You would try and attend games with friends who know the game. Listen to them talk. Read the newspapers and internet looking for articles on the game and its players!
    Soon you speak the language; soon you are in the game!
    Being knowledgeable about football or basketball, will not make you wealthy, whereas an understanding of Shares Trading and markets will!

    It is always about what we choose to be our passion!
    Choose passions that prosper you, and your family!

    Reply
  10. Strive Masiyiwa Post author

    Rawlings writes,

    #Shares.

    Chief, I am keenly interested in the shares subject. Kindly take a lil time to properly educate us about the ABC of shares.

    #If shares is a way to build wealth, how do I go about investing in shares?

    My reply,
    You need to build a business which can qualify to join the stock exchange. You then sell some shares to other people.
    As your business grows more people will come looking for shares in your business, the demand pushes up the price. This means the value of the shares you hold keep going up, and up!
    That is how the billionaires are created!

    If you don’t know how to build your own company, then you have to identify one of these smart entrepreneurs, and buy shares in their businesses, as early as possible, then hold onto the shares. Your own value will go up with the shares of the founder entrepreneur.
    This is what investing is all about.
    The founder is the one who owns most of the shares.

    Reply
  11. Strive Masiyiwa Post author

    Reflection:
    When Econet Zimbabwe listed on the Zimbabwe Stock Exchange, each share was worth 10 US cents. and the whole company was worth $10m.
    Today the shares are worth $250 each, and the company is worth $3,9bn.

    I know a man who bought shares worth $10,0000 and gave $2000 of shares to each of his 5 children.
    #Question 1:
    How much are all the $10,000 now worth?

    #2. How many of those children do you think still hold the shares today?
    [guess].

    #3. If he had kept the entire $10,000 in a bank account earning 10% interest how would he have in cash, after 20 years?

    Reply
  12. Strive Masiyiwa Post author

    Kelly writes,

    Sir, have you ever heard of https://ari.farm from Somalia? You buy a camel, goat online from @aridotfarm . You name it and Arifarm takes care of your livestock and sells on your behalf. if it’s a camel, they milk and sell milk. After selling, you can then choose to withdraw your money or re-invest. @aridotfarm have clients in China and Japan who buy livestock using bitcoin. ari.farm. Isn’t this a perfect guide to #Re-imaginingRural? Wow!

    My reply,
    AMAZING!!!

    Reply
  13. Strive Masiyiwa Post author

    Rawlings Essang writes,

    #Shares.

    Chief, I am keenly interested in the shares subject. Kindly take a lil time to properly educate us about the ABC of shares.

    #If shares is a way to build wealth, how do I go about investing in shares?

    My reply,
    I cannot teach you everything you need to know about shares on a platform like this. I would have to write about it every week for a year to get you to a place where you gain a deeper insight.
    My objective is simply to flag, and highlight the importance so that I can spark a desire for you to go out and learn more.
    If I have done my job then one day you will know more about the subject than me.

    Reply
  14. Strive Masiyiwa Post author

    Reflection:
    I first learnt about buying and selling shares when I was only 14 years old.
    The country I lived in (Zambia), did not even have a Stock Exchange, and yet I knew about Stock Exchanges, and how entrepreneurs and investors use them.
    Let me tell you a secret:
    My entire class at High School [in Britain] knew about shares, and often discussed with teachers the performance of certain companies.
    This was because there was one teacher who believed that students had to be equipped to create and manage wealth. Just imagine if we injected such teachers in African schools.

    Let those who have ears to hear, hear what I’m saying here!

    In the US [and other countries] there is an investment scheme called “401 k”. This is one of the reasons that even blue collar factory workers, and the vast majority of small business holders watch the stock market on a daily basis.

    So here is my point:
    If a 14 year old child can be taught about creating wealth [raising money from a Stock Exchange to finance a business venture], or about how to select companies on an exchange and how to monitor their performance. How then can anyone on this platform say “it’s too difficult to understand”!

    Further, if a factory worker in the United States, or Australia knows how to invest in stocks, as part of their retirement, how does a senior civil servant, or entrepreneur in Africa, not hold a single share as part of wealth and investment?
    How?!

    Reply
  15. Strive Masiyiwa Post author

    Festus writes,

    This is nice I hope soon you’ll introduce to us how venture capitalist work.

    My reply,
    I have written before about Venture Capital Investors. When my own business was very small, I participated in one of the first ever venture capital initiatives in Africa. It was run by the Private Sector arm of the World Bank (known as IFC). That was in 1990. When it was reported in the newspapers that a young African had received so much money ($250k), I was picked up and interrogated by the country’s intelligence services. What my Pastor called “Ignorance on the rampage”! They almost killed me, and it required the intervention of the Minister of Finance !
    Anyway, today there are thousands of Venture Capital investors working in Africa. Some are international and others are local.
    It is incumbent on you as a smart entrepreneur to research and know who is who, and how to access them and make a pitch. I’m not going to do it for you.

    Reply
  16. Strive Masiyiwa Post author

    Ivan writes,

    I have to admit that for the first time to hear that [billionaire] wealth is mostly measured through shares in a public listed company, for me I thought by having properties, and cash is wealth, Thx Dr. Strive.

    My reply,
    99% of the time!

    It is about #Shares!
    In companies that that they created, listed and watched grow in value.

    The vast majority is in Public Listed companies, but sometimes [to a lesser extent] private companies.

    It’s nice to have some land here and there, or even some property but it’s not considered smart or sophisticated investment to have all your wealth tied up in land and houses [shhh…it’s old school type of thinking…keep that to yourself].
    My grandfather believed in cattle!

    And as for cash, billionaires don’t hold a lot of cash! Perishes too quickly…

    Shh..I know they didn’t teach you this stuff in school, but you are not in school anymore so get learning for life, because school is not there to make you a billionaire!

    Reply

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