Pause: The trader from Dubai 

__What is your business model?

There is a hilarious story I was told by a friend of mine from Dubai which I want to share with you. In the days when Dubai was just a simple trading post, there were two brothers. The older of the brothers had been a very strict incorruptible customs official all his life. 

The younger brother was a free-wheeling and sometimes corrupt businessman trader who wandered around the Middle East buying and selling contraband.

It so turned out that one day the older brother was assigned to manage a border post, and low and behold he saw his brother arriving with 20 camels, each loaded to the hilt with merchandise.

“My crook!” the older brother told his officials. “I will show him no mercy if you catch him with contraband. I want you to search those camels and confiscate anything being smuggled.”

For hours the brother’s camel train was searched and they surprisingly found that everything was perfectly in order!

The brother was allowed to go through.

The following month, the brother returned and went through the same ordeal as the officials tried to catch him for smuggling. It went on for years, with the younger brother always able to show proof that he had not smuggled anything. Meanwhile he just got richer and richer.

The older brother was promoted in his own job, and eventually retired from the civil service with total honor. His brother got richer and more powerful, and eventually their relationship improved somewhat.

It came time for the elder brother to die, and he called his younger brother to his death bed.

“Let me die in peace, my brother. I need to know the truth from you. I know you are an unrepentant scoundrel, though you are my brother. I’m now retired and there is no harm I can do to you. Just tell me the truth…”

“What were you smuggling?”

“Camels,” the brother replied.

Lesson:

The lesson for the entrepreneur is not to emulate the scoundrel brother (!) but rather to learn to understand the business someone is engaged in, and how that business makes money.

Now and again, I have urged entrepreneurs to try and understand how certain business models work. If I ask you how do businesses like WhatsApp, Twitter and Google actually make money, most people would glibly say “advertising.”

And as I have said before, that answer is insufficient to earn you a “pass,” and more importantly, you would not be able to start a business using such models, because you simply don’t know enough. The consumer-minded says, “I really don’t care, as long as it’s as cheap as possible, and works well.”

Meanwhile these huge businesses like Google — which is worth much more than the economy of Nigeria — just get bigger and bigger!

We need entrepreneurs who can really study business models and understand how they make their money, to the extent that if they were asked to replicate them, it could be done successfully.

Believe it or not, there are also a lot of entrepreneurs who make money in a business they don’t really understand. That, too, is possible! (But rarely sustainable!)

There are also a lot of very honest civil servants just like the older brother. Unfortunately, some of them have the same mindset… They really don’t appreciate or sometimes even understand the businesses they are trying to make policy on.

Sometimes you can’t help them because they are completely convinced in their own minds that they know everything they need to know. Other times, I am sure they appreciate when you can point them in the direction of good credible information. As I have written here before, technology is changing our world very fast…

The global economy is increasingly being dominated by companies with a scale and capacity that has no historical equivalent. They trade in goods and services whose complexity and business models are ever more complicated.

Here’s just one link for those of you who want to know more about “business models.” Remember though, I can’t do your homework for you!https://hbr.org/2015/01/what-is-a-business-model

It is not a laughing matter when both entrepreneurs and policymakers in our countries have only a superficial understanding of what is really going on. Some of us are happy to shout our lungs out on Twitter and Facebook with little thought as to how they make money—from us!

How about business models where we#MakeMoney from what they do instead? Surely by now you are thinking and working hard on that, senior class!

End.

 

 
by 6 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.

6 thoughts on “Pause: The trader from Dubai 

  1. Strive Masiyiwa Post author

    #NBA Africa game next week!

    Thousands of basketball fans will be descending on Johannesburg next week from all over Africa, and the world, for the annual NBA Africa game!

    For those who do not know what it is: The National Basketball Association (NBA), which is to basketball what English Premier League is to English soccer, brings two team to Africa to compete against each other.

    Kwesé Sports will be broadcasting the game to Africa, just like it did for the World Cup. The game will be next Saturday, 4 August. It will be free on national broadcast channels, as well as on Kwesé iflix! Unlike the World Cup where we broadcast to 38 countries, this time we are broadcasting in 54 countries!

    Reply
  2. Strive Masiyiwa Post author

    Afterthought 1.

    “It’s not the employer who pays the wages,” said Henry Ford. “Employers only handle the money. It’s the customer who pays the wages.” Never forget to listen to them!

    Reply
  3. Strive Masiyiwa Post author

    Afterthought 2.

    For those of you not yet in the senior class, let me share with you something to get you started. Dr Joan Magretta (formerly of Harvard Business Review) defines a business model with two parts:

    “Part one includes all the activities associated with making something: designing it, purchasing raw materials, manufacturing, and so on.

    Part two includes all the activities associated with selling something: finding and reaching customers, transacting a sale, distributing the product, or delivering the service.

    A new business model may turn on designing a new product for an unmet need, or on a process innovation. That is, it may be new in either end.” https://hbr.org/2015/01/what-is-a-business-model

    Reply
  4. Strive Masiyiwa Post author

    Afterthought 3.
    Did you download Kwesé iflix yet? I need your help to make it the biggest media platform ever so tell a friend and keep giving us your feedback. What a World Cup that was!

    One last story till we finally move on from it till 2022… Did you hear that France’s young wunderkind player Kylian Mbappe (the first teenager to score in a World Cup championship since Pele) donated 100% of his World Cup earnings to charity! 19 years old and what a generous heart. https://www.goodthingsguy.com/sport/kylian-mbappe-charity/

    Reply
  5. Strive Masiyiwa Post author

    Reflection:
    Find Consistency in anything you do!

    Every week I find time to write this blog, and almost every day, I find a few minutes to read comments and respond.
    Commitment to do anything is only as good as you are prepared to be consistent, without making excuses.

    Reply

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