Welcome to the Octagon session this week.

 

The Octagon: We appreciate your taking time out to join this chat session. We have two moderators in the room who will only offer guidance where necessary. Please feel free to openly share your thoughts and experiences.

Let’s begin with some introductions before going into the discussion. Can everyone let us know who they are and share a bit about what they do?

Otisi: My name is Otisi Ukiwe. I work with a risk management and security company in Lagos. I have a passion for sports and own a sports marketing and management company. May I just be permitted to state that being invited by The Octagon is an honor and also very humbling

Tobi: I am Tobi, I manage strategy for a financial institution.

Gbenga: Product Manager, Financial Institution

Bankole: Bankole Oluwafemi, Blogger. Co-founder of BigCabal Media, publishers of Techcabal and Zikoko. Currently missing his stop in a Keke because he is typing this.

Emi: Name is Emi Faloughi. Currently running my family holding company AKA learning to be a Jack of all trades and trying to be master of all!!! I love travel, art and making jewelry (which I flog by the way!)

Donald: Donald Okudu, Creative Director, Mesh Media Labs & Mesh Ad studios

Kunle: My name is Kunle Erinle. I’m a certified Solution Architect, and I work with Intelligent campaign hub ltd – we create digital solutions.

Chiekezi: I am Chiekezi Dozie, I work as a sales director for a multinational ISP, I’m also a professional photographer, serial techpreneur, Co founder of Ediyara Technology Group and Co founder of www.nigerianbride.com.

The Octagon: Great. Everyone is here. Let’s begin.

Growing businesses face a range of challenges. As a business grows, different problems and opportunities demand different solutions – what worked a year ago might not be the best approach. Effective leadership creates a clear path and makes the most of the opportunities, creating sustainable growth for the future. The adage that two brains are better than one may explain why a lot of entrepreneurs and small business owners create partnerships. Today, business partners start businesses together with little planning and few ground rules. Sooner or later, they discover the hard way that what’s left unsaid or unplanned often leads to unmet expectations, anger and frustration.

Should more Nigerian small businesses consider partnership? What are the Pro’s and Con’s of partnering in Business? What are the ways in which a partnership can work?

Otisi: In my opinion partnerships are very important and key for growth. One of the key partnerships I feel is in the employees – a big partnership that is generally ignored.

Chiekezi: I agree totally with this but I think a lot of people don’t go the extra mile with employees. For me 20% equity is vested in all employees.

Tobi: I think small businesses need to partner to succeed or expand. You can’t know everything required to grow your business.

Chiekezi: For me the fundamental principles of partnering in nigeria as simply trust, mutual respect and openness. Partnerships are key as all knowledge cannot and does not reside in one person.

Otisi: I agree Chex. But I will also partner with someone I don’t trust. I will however build the required barriers. Even thought this could be limiting. Buhari/APC/CPC by rhetoric partnered with groups/people they hated 4 years prior. What happens if someone who you don’t like/trust can be the route to achieve what you want to achieve ? Will you shift your goals ?

Chiekezi: No I won’t shift goals. I will find another way to either hire or buy the expertise via consultants.

Kunle: Would you say that the APC partnership is working well less than 2 years down the road?

Emi: @Otisi Limiting…but Necessary. I work really simply – I trust u but I verify. The key I find is to understand (as best as you can ) the underlying motivations of those u are partnering with. I like what you say, but actions speak louder than words.

Tobi: Building the right culture is the single hardest thing in business. Ownership mentality however is even harder to instil or brew within an organisation. Like Emi mentioned it’s hard to figure out everyone’s motivation and that is crucial to ensue ownership.

Donald: Totally agree and maintaining that culture or rather improving it. People’s motivation changes with time.

Kunle: Partnership is key when complimentary skills are brought to the table, however our culture is one of the reasons why partnerships here often fail. Successful partnership is built on honest open and objective discussions. In Naija we tend to do things based on sentiments a lot.

Chiekezi: This is quite simply because in my opinion Nigerian Workers do not understand the concept of ownership culture unless they are vested.

Otisi: I think the thing about partnerships is just about the goal.

Chiekezi: I disagree. Not about the goals but for me more about shared vision and each individual’s fundamental principles.

Emi: To reach a goal you have to do all sorts. The Goal is there but the method is just as important. It may cost u something but if integrity is a key facet of your company, you will avoid some partnerships. You must have certain lines in the sand that you won’t cross.

Otisi: I am all for integrity. However, one man’s integrity is another man’s “Shit-house” (excuse the word).

Kunle: It’s dangerous in business to go into partnership on the basis of common enemy or common goals alone. I think partnerships also come in various forms, e.g I could partner with a company to make a joint bid, that does not necessarily make us best of friends or share common goals but it means we recognize value and our need for each other.

Tobi: I think to partner effectively, one should articulate what is going to be beneficial to each party and build your business and compensation model around these factors. As a business you must determine very quickly what values are required and are important to the proprietors. Some you can determine from the onset but others you make it up as you go along.

Otisi: So what’s the objective of a partnership? And can shared visions have different goals?

Emi: You can have a shared vision of a good life. Where people get it twisted is that, Good life/business etc means different things to different people.

Otisi: But what happens when integrity is playing against life etc. This should have been determined before becoming “joint proprietors”.

Chiekezi: Fundamental principles and beliefs are critical. Let me just say this, most partnerships are not worth the paper their contracts are written on. ALL my most successful partnerships never started with any paperwork but simply a common vision and trust and most importantly, FRIENDSHIP.

Emi: Most of us went in green and have been burnt well. Experience has been my greatest teacher.

Otisi: When you’re still standing after burns… It is good. I think when it comes to any partnership, it is about what you’re willing to give up/sacrifice for a common goal.

Tobi: But you must still share some ethos or else that is a recipe for disaster.

Kunle: I actually have a partnership today that is only about making money and there is no ‘ ethos’ involved. Well the ethos is make money and no wahala. Lol.

Otisi: How can I be a part of this ?

Kunle: Lol !! Collaborations are key in this economy but we don’t do enough of that.

Emi: Because people are afraid to share. If I open up to u and share information, how do I know you won’t screw me. I believe u must share information. It’s the only way to build trust. Yes its a risk but…you look well before you leap and hope

Kunle: True… But you only volunteer what is necessary per time.

Tobi: Experiences usually get the best of us. I think clearly defining what every party is bringing to the table is critical and the depth of the partnership should be based on contribution to the vision and objectives of the business.

Chiekezi: Information in this digital age is everywhere. How it’s used is the key.

Otisi: Every other day people bring business opportunities to me and I sometimes jump in and sometimes I let them go. Never do I look for agreements etc Because I have a belief that If anybody wants to cheat you, They will. I just jump in to achieve what I can. Business is a different kind of politics, the same way politics Is the business to some people.

Tobi: Experiences usually get the best of us. I think clearly defining what every party is bringing to the table is critical and the depth of the partnership should be based on contribution to the vision and objectives of the business

Gbenga: Politics and partnership is like the devil and the deep blue sea. Full of connivance. I think if we liken all partnerships to marriage…

The Octagon: A good number of the things mentioned seem to be the fear of many and reasons why they don’t collaborate. However if these collaborations are necessary, how do business owners best go about this.

Kunle: I’m a firm believer in partnerships but one of the challenges I face is that I end of doing most of the work. Exit clauses are critical.

Gbenga: Go in with your eyes open. You have great marriages because there was proper courtship…knowing each other and trusting before you agree to go in. Same as business – know your would be partner. Court, Trust, and Engage. If in doubt, butt out, another will come. Also, there needs to be Mutual understanding.

Tobi: I think you just need to be clear on what you want from the partner and what would best motivate them to deliver their best. Sometimes, relationships are transactional, hence you don’t need an elaborate partnership model.

Emi: Take your time, and Believe people when they show you who they are. Also, understand yourself.

Otisi: Businesses need to have clear objectives and plans. I will do business with someone I don’t trust/like if I am able to plan and see the beginning to the end. If I can’t, I’ll be weary and may not even partner. I think the key thing that affects people when it comes to partnerships is what other people think. Most times I couldn’t care less.

Gbenga: Let’s not misconstrue doing business and partnering. Partnership is having a mini-you…more like a mirror of you in your business and either can take decisions.

Bankole: Fascinating. Where I come from, things are a tad simpler. One person executes an idea and they are a sole founder. If more than one, they are co-founders. People will only typically co-found a company with clear terms about equity splits, usually from day one. They might not do so at the idea/MVP stage, but the minute it looks like there is an actual business to be had and they are considering approaching investors, that conversation will be had and gotten out of the way. Most startup accelerators make co-founding a requirement. Solo founders, at least in my space, are not rare, but they aren’t teeming. Because startups need to move fast and break things and find a scalable business model in the shortest amount of time, by default we are wired to seek out people who complement us. Founder agreements and vesting clauses take care of most potential disputes, for the ones who have the presence of mind to set them up in advance.

Kunle: It’s unbelievable number of businesses that are built on ‘trust’ alone and no paper work.

Chiekezi: Yup, I’m one of them.

Kunle: You must have an underground bullion van. Lol.

Tobi: Well, that is impossible to do. You need to be clear on how to protect yourself though. Prepare for the worst and expect the best. Tough model, how scalable is that?

Otisi: In team sports… They’re all partners but someone gets MVP.

Chiekezi: We have more to lose, such as our friendships, than business. Like I said earlier, contracts in Nigeria to me are just useless bits of paper. For me it is about the spirit and intent of the people. Surely if you told your wife/husband to sign a pre- nup before marriage it would erode some trust?

Otisi: Agreed. Contracts all over the world. Not just Nigeria.

Emi: Yes…We have issues with people and businesses following contracts but u still need them. Not to say you won’t see HELL enforcing it but without it?

Kunle: Contracts for me are important as a reference point because even good intentions sometimes can be pressured to make wrong decisions. I’ve been burnt too many times without proper documented terms of reference. All because we are blood. Greed is a really shocking beast.

Tobi: There are different levels of partnerships, I am sure you don’t need to partner with your gateman, but you need to partner with the most important ingredients providers to your business. Be clear, be fair, be specific and get everyone’s buy-in to their commitment and rewards. Without proper documented terms, you are naked. Marriage has a document, the certificate. And there are implicit terms in that certificate.

Chiekezi: And they are very successful going by the stats in recent times? Like I said…spirit and intent.

Tobi: Going into a business without a contract with partners is like dating a girl you love without marrying her. No contract, no sin. How long are you going to date the girl for before she gets tired. 5years, 10, 20? Bottom line is, contracts define the rules of engagement and protect everyone from the human selfish nature in all of us.

Emi: If the girl has sense, she will exit the stage quickly. If not, she has entered one chance and though she will come out of it, It will be painful.

Otisi: It is all about both being ready.

The Octagon: A number of people fear losing their businesses to partners and especially investors. They dream up these businesses and nurture them as they would a baby. They are as a result adviced to maintain controlling shares of the company. How do you they determine what amount of equity to give out?

Emi: How badly do you want or need that investment? All depends on what and where you are aiming. Like Dragons Den…who the money is coming from counts.

Otisi: I think you only give what you can afford to lose. Same thing with when you lend money to people. Only give what you can afford to lose.

Tobi: You have to be clear on what you need from them and what they need from you. If you will be losing the business, make sure you get enough compensation to start something else and build that into the contract.

Kunle: Great ideas= 5%, Great ideas + right team= 55%, Great ideas+ right team + right funding= 95%. 5% is left for possibility the business might still fail.

Bankole: Lol. Lenz’s theorem of equity splits.

Kunle: Banky, I’m sure you’ve seen a ton of these our young start up guys hugging their equity and telling investors 5% and things.

Bankole: I take it you are an investor. Or interact with a lot of them.

Kunle: Yes. but I invest mainly in my own ideas. But I work a lot with start up businesses and see a lot of false expectations.

Emi: I’ve invested in a few things….Some have worked and some have not. But its always been about the people. The ideas were great but the clincher was the person/people involved. And I did not invest more than I was willing to lose.

Tobi: Ideas without resources are worthless. Think about how many ideas you’ve had and done nothing about. So you need to trade your ideas and be ready to give it up at some point. But make sure you’re giving it up for the worth of the idea. Investing is high risk, high reward. But just make sure you are well hedged in all your decisions.

Bankole: There is a reason why taking minority stakes in a business is not only the right but the sensible thing for an investor who wants to ever see their money come back in this life.

Kunle: What do we do about this people issue in Naija o? I’m honestly worried. My experience is that there is a drought in quality of thinking even though there is an increase in people going into business.

Emi: Pay attention to what people do Kunle. We are constantly allowing ourselves to be swayed by words with no action. How many times have you met people in surroundings or situations that engender trust. Your barriers are somewhat down and they are speaking to you on the same wavelength (Or so you think). You trade ideas and step by step you decide to work together one day, and Gbam! Problem. It suddenly dawns on you that in your desperation to not walk this path alone, you didn’t do the true due diligence on this person. Can they write? Are they punctual? Do they have the contacts that bring business that they have said they could bring? or are they looking at you to do the work. There are a lot of people that enter partnerships but what you have is an employee with attitude.

Otisi: People in Nigeria aren’t the problem. Hungry people in Nigeria are the problem. And the majority of the people are hungry. That’s the problem. So it is only human. Until the majority identify with this… Nothing will change. There is a real struggle out there where the basics are lacking. Therefore the minimum becomes survival. When it is survival, You have nothing but selfishness.

The Octagon: What do you do when you are approached by someone who has an awesome idea and business model but awful personality and character.

Kunle: Take off! A guy with a bad attitude ticked off an investor I was on a call with so bad last week and the investor was going to cancel the deal because of his attitude. Smart investors put money in people and not ideas.

Emi: Yup. That guy is a liability. If it is a pattern…exit left. If he was having an off day, warn him well.

Bankole: Mayday. Engaging evasive maneuvers. Abort mission.

Tobi: Character is the most important factor in every partnership

Gbenga: Sign an agreement that you will be the front person…it’s simple. An average Nigerian is Grumpy. Managing and grooming a business involves managing people.

Emi: Yes. Shout First, and ask questions Later. Nothing makes me grumpier than messing with my money.

Otisi: How do you define an average Nigerian? What are the characteristics? I like to think I’m an average Nigerian. Eating beef and onions doesn’t sound appealing. But Suya and onions on the other hand… Partnerships are what you make of them.

Chiekezi: Depends on your palate.

Donald: Partnerships are organic, they evolve as we grow in the business. There are guiding principles but because of the human factor things would always change. Values would change, greed, complacency etc

Emi: I Agree. It’s takes time…

The Octagon: We will be ending this conversation in 5 minutes. Lets share what we think our final thoughts on the issue are and possibly give a guide as to best ways to make a partnership work. Thank you.

Chiekezi: Partnerships are essential to life and business. In both cases you must find the model that works best for you.

Bankole: I endorse what Donald said. The part about partnerships being organic. I have done two serious ventures in my short time. Partnered with people both times. One of them is current. The common denominator is that we were first friends. It’s not Kum-Ba-Yah everyday, but if you first take the time to know someone, the probability of success is much higher. Bless up.

Otisi: There are many pros for partnerships and we should mostly focus on the pros.There will always be cons. The success of the partnerships will only be determined on how we handle these cons.

Emi: Partnerships are important to grow any business but be careful, choose wisely and be clear about what you and the other party want out of it. Be clear about expectations AND ASSUME NOTHING, BE EXPLICIT in everything. Get into the habit of documenting everything, and I mean EVERYTHING. Any serious minded person will understand and appreciate it.

Tobi: For partnership to work, it’s important to evaluate what the business idea is worth, what resources (which includes people with good character) are required to bring that idea to life. Ensure there is always a contract protecting the interest of all partners and pray to God to bless your endeavors.

Donald: Partnerships are made in heaven, very smart people with delectable personalities with all the right funding have partnered and didn’t work still. Partnerships like relationship should be constantly re-evaluated periodically. Relationship is work, always match the other persons effort.

Otisi: : Before we all disappear into the sunset… May I just say this has been interesting… I hope we all find the necessary partners in business and life that will bring the best out of all of us. Thank you The Octagon. Stay safe everyone and stay happy. Don’t do drugs without a prescription. Lol.

Emi: One more thing. Always build in an exit clause. If u don’t want to be in a partnership anymore, Please be honest – don’t start displaying madness until things get petty, hateful and legal.

Kunle: Agree with above , I honestly don’t know if it’s possible to build a lasting business legacy without right partnership in one form or another but what’s key is ensure you compliment one another and be humble enough to accept you will both have highs and lows as well as periods one feels he is contributing more than the other, documenting your vision and terms of reference and finding the time to bond on a personal level helps to mature the partnership over time. Also be prepared to move on in the event it’s not working.

Emi: Good Night All.

Tobi: It’s an honour to discuss with you all. Thank you The Octagon for this opportunity.

Kunle: Cheers guys! Nice chatting with y’all.

Donald: Thanks The Octagon and to all the amazing minds here tonight. It was mad insightful!!

The Octagon: We truly appreciate the contributions made in this conversation. This was very insightful.

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