“I built a conglomerate and emerged the richest black man in the world in 2008 but it didn’t happen overnight. It took me thirty years to get to where I am today. Youths of today aspire to be like me but they want to achieve it overnight. It’s not going to work. To build a successful business, you must start small and dream big. In the journey of entrepreneurship, tenacity of purpose is supreme.” Aliko Dangote, Founder of Dangote Group

Read my book – The Dangote System – and understand how the accumulation of capabilities which compound can help you build great companies. Dangote began as a trader, just like his peers, but over time, he accumulated capabilities, and moved from the downstream to the upstream. At the upstream, he became the category-king.  I explained how anyone can replicate that model in other domains, highlighting the success of Indomie noodles, among others.

Read The Dangote System by Ndubuisi Ekekwe

Response on FB Feed

Dangote Government Support: Dangote is not the only man that gets benefits or deals from governments. But Dangote is the only man who built an industrialized conglomerate of his own. You do a big disservice to yourself by focusing on what everyone knows and which is a major part of the book: Conglomerate Tax. Yes, Dangote taxes us via these benefits but interestingly all conglomerates in the world do the same.

The problem for Dangote is that he is alone in Nigeria. If there are 20 of them in Nigeria, we will not care. Wait, we will accuse him in 5 years of rigging fuel because he will fix it. In 15 years, he will come for power and fix it, we will say the government gave it to him. What is his magic? That is the book focus, not wasted talking points.

Check Amazon, some cities gave tax waivers to HQ2 in $billions in US (Columbus gave $2.28 billion but lost because it was small https://slate.com/technology/2018/11/amazon-hq2-incredible-incentives-losing-cities-offered.html ). Can any SME in America get the same? Not possible. All conglomerates get government benefits including GE, etc . There is no human with $2 billion to invest who will not ask for government benefits

Follow up:  Read the book. Your problem is that you are going after Dangote’s own markets. In markets, there are territories. If you go to cement, he will fight you just as they fought him when he went to banking (his Liberty Merchant Bank went bankrupt, the leaders there gave him what he gives others in cement). He went to noodles, Indomie gave him what he gave others in cement; he lost to Indomie. The illusion in Nigeria is that the government helps Dangote and all his businesses are successful. That is fake news because if you study him, he has many losses. This is how it works: do not go after Ovia, Elumelu, etc in banking because that is their turf. Do not go to Dangote to cement. Power is available. Agriculture is available. Healthcare available, etc. But when you begin to venture into “own” domains, they will fight you.

And do not think it is only Nigeria. There is no Silicon Valley startup that can claim that it can win contracts in Washington DC. Why? Those are territories which some companies have decades-long positioning. They will frustrate you. The world celebrates Elon Musk and Tesla but the government people continue to praise their Ford, GM, etc because those are the people closer to lobbyists. Elon has been begging to be recognized but none cares: you can be the richest man in the world and own the “richest” car company in the world, but you do not have an office in Penn Avenue lobbying for your position. You can win in the market but others own this space https://fortune.com/2022/03/02/biden-elon-musk-tesla-ignored-state-of-union/

I have stopped writing about Ukraine after LinkedIn deleted my opposing view of the global bandwagon Western narrative. With that, I concluded there was no need wasting time since if you have a different opinion, they delete the same. Simply, they censor you which is what they accuse China of. At that high level, business works that way: you keep your lane and they do all to maintain.

Sure, you can fight and get in and if you do, they celebrate it. But it does not come by complaining!

Update: You are making my point and yet you are complaining. I never said that Dangote does not get benefits. I am simply saying that if Azubuike has $1billion to invest in Abia state that I will work to get you government benefits. Dangote should be stupid investing $10billion without asking for incentives. Amazon got $10B just to build second headquarters – that is how conglomerates live.

The Dangote System: Techniques for Building Conglomerates

The term ‘disruptive innovation’ is fast becoming commonplace in the startup space. Many founders would conveniently describe their innovation as disruptive even when it does not exactly fit the description. I get the impression that they do this because of some perceived reputation that they think disruptive innovations should have. However, not every innovation in space is disruptive, and your business does not have to be a disruptor to survive.

Disruptive innovation is a product or service, usually more simplified and affordable, that is introduced into the market to cater to the part of the market that has been largely ignored by other players. Often, such products are introduced by new and smaller players, and it gives them a foothold to enter the market. Large market players sometimes introduce disruptive innovations to cater to a market segment they may have ignored over time. It may involve tweaking or transforming an existing product (maybe expensive or highly sophisticated), into a simpler, cheaper, and more accessible product that can cater to that segment of the market that was ignored.

Why does this happen? Most times, market players would prefer to focus on satisfying the needs and desires of their most profitable customer base, largely ignoring some market segment that is perceived as less profitable and less desirable. This now creates room for entrepreneurs seeking to get a foothold into the same market, and they take advantage of the lack of attention, target the ignored market segment with affordable solutions. This unattended market segment, though little in the beginning, grows over time and gives the innovator a foothold in the market, long before other players start venturing into the same space to compete.

Creating new products and solutions to serve a market segment that was already being serviced is not disruptive innovation. It is more like sustaining innovation. (topic for another day).

A solid example of disruptive innovation is Amazon. The internet community was growing at the time, with an emerging niche market of online shopping, book enthusiasts. However, the traditional brick and mortar bookstores did not see a market large enough to deserve their attention, and so focused on selling their books out of the shelves. Jeff Bezos came in with his innovation to attend to this market, and this became a disruptor in the bookselling industry. With time, the physical book shoppers got interested in online shopping and started making the shift, gradually increasing the small market share Amazon catered to in the beginning. Now, Amazon has gone way beyond selling books, to everyday items like groceries. From disrupting bookselling, Amazon ended up disrupting selling as a whole.

What you can see from this is that to be a disruptive innovator, you must have done some research, and have solid evidence to believe there are potentials in the market segment you want to service. It may be cool to serve a small segment in the beginning, but how quickly this segment grows will determine how long you remain in business.

What Amazon saw and predicted was that the power of the internet (on which it was building its business model) would grow in leaps, increasing their customer base and keeping them in business for a way longer time than the then-big-players thought.

Most entrepreneurs now are taking the route of sustaining innovation, which means finding easier, cheaper, and faster ways to service the existing market. This is also a good option, and there are several successful businesses now that started along this path.

You will need solid market research and accurate projections to start and scale a disruptive innovation business – much more than you would need for sustaining innovation where the market need has already been established. In the end, it is really up to you to decide.

As we welcome Franklin Peters Odoemenam – the blockchain oracle – tomorrow to discuss decentralized finance (defi) and NFT marketplaces, please read this piece by Tekedia Mini-MBA alum, John Mc Keown. John looks beyond cryptocurrency, fintech and defi and then asks if Africa is ready for Web 3.0

At Tekedia Mini-MBA, our members influence some components of our programs. John captured it when he quoted this line, possibly from the community: ‘That NFT stuff is not for people who are occupied with food and clean water. Not sure it will be durable in Africa’.

That is how I see it. How can NFT help the GREAT Ovim people of Abia State and how can it make Oriendu Market better? I have been waiting for Auntie Ngozi Okonji-Iweala’s policies in the World Trade Organization to change how people buy garri, yam and plantain in Ovim. Yes, trade happens in Ovim – big time. And WTO must pay attention. Lol.

Good People, we expect to have a great session with Franklin. Read John’s piece to get ideas on the jargons which Franklin will blow on Thur (7pm WAT).