There were several big news this week but none was as important as the decision of Oluwatoyin Subair, the man behind HiTV, to tell the story of why the company failed. In his piece, I identified 5 very important lessons that Nigerian startups and entrepreneurs need to learn from him in order to give their companies a surviving chance in the ecosystem.
You need Government and regulation on your side
He admitted that he ignored government to his own peril while his competitors were courting the government.
“The competition spent a lot of time courting all arms of government and I was a simpleton. We just expected the whole world to cheer us on. The laws in Nigeria are as empty as they are full. A lot of writings but you have to make sure your business model is adequately protected,” he said.
“What laws do you need, or what interpretations of the laws do you require, go and get it passed or adjudicated. Don’t assume its there and don’t be afraid of offending anyone. A few weeks before we lost the EPL rights we were approached by the competition to share it with them, in writing. We agreed and were completing the approvals on both sides when we lost the rights. Since they bought it, we asked them for it on the same terms as we had agreed to give it to them just 2 weeks prior, they refused. We ran to government to enforce the fairness clauses of the NBC Act but it fell on deaf ears.
“We really should have actively pursued the enactment of anti- monopoly laws and competition rules early enough as exist everywhere else in the world. The truth is we never believed in monopoly and offered all our acquired TV rights to anyone who was ready to share the price with us. Our purchase of football rights was defensive, as that was the only way we could get it. Unfortunately, our government was happy to, as they continue to be, leave everything in the hands of foreign dominant players.”
Watch your debt profile
He also advised business owners to be mindful of their debt profile.
He said: “HiTV was paying an average of 1.1billion Naira approximately in interests and guarantee charges annually, for over 5 years! For a new company, we did a damn good job but really got blown out once our house was divided. I never live by debt and so was really ignorant about how interest works up till HiTV and of course since then you wont catch me near it. But what do you do when you have to? They say internationally that “equity is more expensive than debt”, but that is NOT true in Nigeria. Debt is way too expensive and destructive.
“At the end of it all I was sued in my personal capacity for the debts of the company by the bank, but we have since sorted out our differences, agreed, signed and filed terms of settlement in all legal actions. The Managing Director simply told me, when we finally met, that since we all owned the company I had to pay out of the liability and not just dump it on them. It made total sense to me and I offered them what I had, they accepted and that was it. Fair is fair. You can’t avoid a lot of skin in the game because investors will be looking for this.”
Whatever you do, train people and invest in them
He advocated a fairly unpopular act in the startup space – training people and investing in them.
“However, make sure the people you train and inspire do the same to their sub-ordinates. Usually Nigerians are scared to pass knowledge for fear of being replaced and so you have to teach them to let others fly. Reading the 1 Minute Manager meets Mr Monkey taught me not to micro-manage and get people to earn their pay so that I can be free to do the bigger things. The balance to delegation is to make sure there is a system to ensure that those who are working are justly rewarded,” he said.
“In the absence of a technical foreign partner, we learnt our trade on the job and intensive trainings and we were just implementing our robust researched systems and processes when the company was closed down. How I would have loved to see its results.”
Perception is EVERYTHING in Nigeria
He argued that in Nigeria, your neighbour, banker, staff, bloggers, enemies are watching you and it is not what you are that matters but what others see and are saying about you.
Once you are funded by other people’s money, either investors or bankers, it matters what they think. So your lifestyle must be measured
According to him, even if you have access to other sources of income, you must be prudent in spending and seen to be prudent else it will be assumed that you are “extravagant” and/or diverting other people’s money for your own personal use.
“Solely because it is common place in Nigeria for executives to mismanage corporate funds , people are quick to judge and assume every situation is the same . I never touched company money or take a single bribe or kick back. HiTV had full corporate governance rules in place and a budget that was jealously guarded by a Board that sat 6 times in a year. Even when I went out or travelled with a supplier, I always insisted on paying, but only my shareholders and management team knew that. This forthrightness of mine made me throw caution to the wind since I knew I was clean BUT unfortunately I didn’t realise the negative impact it could have on my reputation. The first thing your adversaries or haters target in order to bring you down, is your reputation. Protect it,” he said.
