This week, Nigerian Senator Ben Murray-Bruce’s company was taken over by the Asset Management Company of Nigeria over unpaid debt of N11bn (About $30m). His company, the Silverbird group of media companies owns a radio station, a television station, real estate investments and several cinemas across the country.
The commentary on social media surprised me. People were advising that his tweets on entrepreneurship should be ignored. Others called his entire business a sham. Some even called him a criminal.
Brian Acton was rejected by both Facebook and Twitter in 2009. In 2014 his company, Whatsapp was purchased by Facebook for $21bn
Entrepreneurship In Nigeria
According to international surveys, Nigeria is one of the most difficult places in the world to do business. One of the most commonly cited problems is financing. Debt from banks is often the only option available to the Nigerian entrepreneur. This debt is short-term, collateralized and often at interest rates as high as 28%. Even if after you service the debt and manage to end up with some profit, this is then taxed at 32%. In addition to this, the economy is in recession.
If El-Chapo was operating his cocaine business here in Nigeria, there would have been no need for law enforcement to put him out of business. He would have gone bankrupt! His business, especially the infrastructure side, would have made major losses. Yet in this environment, entrepreneurs are still able to build businesses, create employment and craft brands that people love.
When many people were sat in Abuja stealing money directly from the Nigerian treasury, taking out contracts for roads that they knew were never going to be built and exploiting loopholes in government policy, Ben Murray Bruce was building. Building an actual business, with staff and assets and systems and controls and processes. This is something that Nigerians are usually very bad at doing. Its is also something that the Nigeria (banks/government/citizens) could be much better at supporting.
When Twitter went public back in 2013, it was an unprofitable company. In fact, the company revealed that it had lost more than $2 billion in total since launching a decade ago. The company lost $520 million in 2015 alone. General Electric one of the world’s most famous global firms holds more than $30 billion in debt, it would take roughly 15 years of its earnings before interest, taxes, depreciation and amortization (EBITDA) to equal its level of total debt. The list goes on from Walmart, to Comcast to Glencore to Tesla.
The main difference between these companies and Silverbird is that the debt available abroad is more long term, patient, flexible in terms of restructuring and belongs to more robust institutions.
Misconceptions about Entrepreneurship
I don’t understand why people seem to think that entrepreneurship is about success. The way the media criticize entrepreneurs such as Elizabeth Holmes, Donald Trump and Ben Murray Bruce for failing, just reflects the lack of general understanding about the nature of entrepreneurship.
Staring a company is like staring into the abyss and eating glass-Elon Musk
The people that don’t make mistakes almost always end up working for the people that do. It’s the job of the entrepreneur to be bold, to take risks, to push limits and yes, to experience failure. And experience failure often. What makes entrepreneurs unique, is not failure in itself. Anyone can experience failure. It’s their response to it. That resilience, resolve and steely determination.
Most importantly, it’s the ability to understand what failure is and what it isn’t. Struggling to work in a difficult financial climate does not make you a failure. Being in debt does not make you a failure. Having to declare bankruptcy doesn’t make you a failure. Having to transition staff, doesn’t make you failure. AMCOM does not make you a failure-the total debt held by AMCOM could not even service general electric! No! Failure is an event, not a person. It’s an event that is part of the natural entrepreneurial life cycle. Failure is simply an opportunity, to more intelligently begin again.
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