General

You have a good idea… then what? In Ghana, ideas unfortunately do not have a well-defined route to turning into large-enough enterprises such that your community, your country, your continent benefit from it.  By the way, you inspired this article.  All of you that text, email, dm and call me after every publication to discuss ideas about varying subject matters, you inspired this article. Because regardless of the subject matter, a common closing theme with all the awesome brainstorming conversations has been “…but Max where at all do we find the money to do this?” Not to get you too excited… but I think I might have found the answer of where to get the funding for anything as small as just an idea, or as big as an already functioning well-to-do business. To fully grasp the opportunity, we need to first understand how things are going to be. If you have as little an idea, and that idea sounds pretty good to an investor, you need to put a price on it. It will totally be up to you to decide the value of your pending company, and how many shares you want to sell to an investor for funding. If an idea works and you start a company, you’ll obviously need money. Many have learnt that the odds really are against you when you start a company with your limited savings, so better get an investor early. There’s just too much risk inherent in the activities of startups and one-man entrepreneurs. If your idea doesn’t take off, you lose your precious time and the wealthy investor learns something towards his next venture. But if your idea starts off well, you’ll soon realise that you need money to stay in business or to scale up; so why not share that early risk with someone that has the liberty of losing their money and has more experience than you do. Traditional financial institutions are beginning to cater better to the needs of the small and the beginning. Still, in Ghana, ideas unfortunately do not have a well-defined route to turning into large-enough enterprises such that your community, your country, your continent benefit from it. When your idea is good enough, typically, you’ll need what we call seed funding. At the beginning, your idea is like a seed, full of potential but useless until it goes into the soil and catered for. You’ll need to first plant that seed knowing very well it might not germinate. Therein lies all the risk that traditional financial institutions do not want to underwrite.  That is why early investors at this stage are called seed investors. Many seed investors are high net worth individuals that have enough money to bet that you are more likely to succeed than you are to fail. How do they know? Every seed investor invests for different reasons. What they all have in common is that they are aware that you are not yet a big fish, but they are willing to grow with you. If the seed is the idea that’s good enough, then what happens when you have an idea that’s not executable yet? That’s the pre-seed. It means you have something, but it’s not good enough to attract serious funding yet. Are there pre-seed investors available? Yes! These are they guys that think “here, take this little token; execute and let’s see if the simplest version of our product/service works”. Pre-seed investors try to help you create what we call the minimum viable product (MVP). Your MVP is a version of your product with just enough features to be usable by early customers who can then provide feedback for future product development. I took this straight from Wikipedia because it explains it well.  See how it mentions “future product development”? It means pre-seed investors understand that their money goes to do the work required (pre-seed) before the work that is required (seed) before the real work actually starts (seed sprout). Further funding are categorized Series A, Series B, Series C, etc. The earlier the stage, the more the risk, the lower the valuation of the enterprise, the cheaper you can buy in, and the bigger the gains for anyone that invested early IF the whole thing works out. Remember that the investee company can as easily just go bust. That’s why seed investors are usually high-net-worth-individuals with lots of money to spare. I’ll give you an example for perspective, then we proceed. Back in 2013, Rapper Nasir Jones, popularly known by his hip-hop moniker Nas, invested between $100,000 and $500,000 into a company called CoinBase in a Series B funding round. That round valued CoinBase at about $150million. Even if he invested the maximum estimated $500k, he then owned only about 0.33% of the company. CoinBase is a platform to buy, sell and store cryptocurrency. I remember 2013 very well. Cryptocurrencies were still spoken of then as a social experiment that was too risky to buy into and could potentially wipe out all of your investments. Fast forward to 14th April 2021. CoinBase goes public with an successful IPO (Initial Public Offering) on NASDAQ. The company is now worth dozend of billions of dollars. Nas’ earlier investment has turned into an estimated $100,000,000 if he invested $500k. That’s a hundred million dollars on $500k within 8years. He could just as easily lost all of his money. Moving on. When you ask investors to give you money for a share of your company, the investors decide on how much they can buy and you as the founder decide on what percentage of your company you can give them in exchange. It’s a negotiation. If for instance the investor gives you ₵100,000 and you decide to give him 10% of your company, that means that you’ve valued your company at ₵1,000,000. You have to divide the invested amount by the percentage given to get your company valuation. 100,000 ÷ 10% = 1,000,000 It is always very important and most advisable to consult a good lawyer and an appropriate finance professional when engaging

19.447 billion metric tonnes and 353.8 million TEU (twenty-foot Equivalent Unit). From January 2020 to April 2021, the volume of cargo that have been through Chinese ports was almost 19.5 billion tonnes. Within the same period, the container throughput stands at over 350 million 20FT container equivalent units. Since the pandemic, China has been recovering faster than many other countries, with their export figures rebounding spectacularly after the first half of 2020. Western countries started buying large volumes of products from China, especially the United States of America. So, huge volumes of shipping containers had to leave Chinese ports. Cargo for ocean freight are transported in metal containers. When these shipping containers are delivered to the port of destination, they usually circle back to the port of loading, albeit many make a few stops along the way when required. When it gets back to the original port, the process repeats itself. That has not been happening. It’s because China is currently shipping way more to the US, Europe and the rest of the world than it is importing. China has been moving a lot of shipping containers to their biggest markets and these containers do not circle back to facilitate other exports. Why? Millions of shipping containers were stranded at many locations around the world when the pandemic started. Congested ports also did not have the needed manpower to process customs procedures in a fast manner. These hampered global container circulation.  Many shipping containers were stranded on Chinese ports as well at the beginning of the pandemic. But theChinese economy rebounded. These shipping containers got emptied and were sent back out due to Western demand for Asian made products. The story is not the same in most parts in the world. A shortage in this instance means shipping containers are congested somewhere, concentrated elsewhere, not repurposed or out of commission. A few months back, Bloomberg reported on a massive backlog of 28 container ships that were waiting to enter just the US ports of Long Beach California and Los Angeles. An additional 16 ships full of containers were expected to arrive over the following three days. A week before that, it was 26 container ships. Reports from officials monitoring marine traffic in San Pedro Bay indicated it was less than the 40 container-vessels backlog peak back in February 2021. Also, back in March 2021, one of the world’s largest container vessels, a 400m-long 200,000-tonne ship called The Ever Given, got stuck in the Suez Canal and frustrated the entire global shipping industry. About 12% of global trade use the canal daily. So it’s understandable how and why it became such a big deal. The Ever Given got stuck after it run aground and wedged sideways across the canal, blocking passage for other ships. There were over 360 ships that were waiting on either sides of the canal to cross during this blockade. This contributed to the current shortage of containers globally. It made worse an already ailing world container circulation. During the second half of 2020, ecommerce traffic exploded all over the world. Amazon profits have soared past 200% since this pandemic begun. China represents a very large volume of suppliers for ecommerce websites and China is currently shipping more to the US and Europe than it is importing. You’d have to also factor in the fact that over the last few decades, there has been a lot of outsourcing to China. So already, China has been exporting massively to many parts of the world. This global container shortage situation has been a problem waiting to happen, only very much exacerbated by the current COVID pandemic. Heavy competition for available containers have sent shipping rates through the roof. The whole situation looks dreadful when you factor in the current limited air freight capacity since the pandemic started. The Airline industry have been dealt a heavy blow with record low number of flights. When there’s increased demand, prices usually rise. With freight rates soaring, and a shortage of shipping containers, coupled with limited air freight capacity, ecommerce companies and their customers suffer. In the West, retail purchasing has shifted to primarily ecommerce because of lockdowns and other COVID-related restrictions. As earlier stated, China is exporting more to the West than vice versa and most of these shipping containers are not circling back. Compared to Q1 2020, freight rates have gone up by as much as 300% from China to the USA. That shipping cost surge must be borne by someone: the consumer. In Ghana, everyone purchases one thing or another that’s imported. Most of our poultry is imported. Most of our rice is imported. When companies suffer added costs yet maintain increased demand, the final bearer of the added cost is none other than yours truly: you. Remember, extra shipping costs must be borne by someone. E-commerce has picked up in Ghana at a fast and impressive pace. The brief lockdown we experienced also accelerated this. Yet, it’s still not mainstream to use an app or a website to order for broiler (frozen chicken product) for cooking. The fact still remains that a large volume of what we consume as citizens are imported. Because China is facing a challenge with container circulation, any country that depends on Chinese exports will be affected. It’s safe to say then that it is why seemingly every country in the world is affected by this inadequate container circulation, including Ghana and where we get our imports. Think electronics; think automobile spare parts; think household items, etc.  What’s happening is that there’s so much cargo waiting to be loaded onto shipping vessels, and the ships are ready, but shipping containers are scarce because of all the above-mentioned.  The higher the demand, the more visible the variance. Here’s an example. Let’s take frozen poultry products. Everybody eats chicken, generally speaking. The sale price of one carton of chicken leg quarters (broiler) has increased from GH¢97 as at two weeks ago, to GH¢115 this week. It looks like it’ll go up a bit next week as well. I know because I checked. All this is because freight rates and other delivery coststo Ghana have gone up just as with other places in the world due to the limited availability of shipping containers. Importers are not carrying these extra

Try to not think “I don’t have the time to read this”. You may be right, but l think you should. These few minutes (maybe a little more than a few minutes) may be a lifesaver. For the typical busy working adult, the routine is often predictable: jump out of bed often by an annoying alarm, rush through breakfast if there’s time, hop in a car, battle the traffic and all its stress, and then off into a busy work day. We work all day. We often get home late and completely exhausted. We then mindlessly gobble down our dinner, much too late for any meaningful digestion. Most of us sit down to catch our breath from the day, only to fall asleep in our chairs after a few minutes of TV and then stumble into bed.  Just when we’re beginning to relax, that alarm goes off again. We wake up once more, and do it all over again. I know this lifestyle because it has been my life too.  Work is good. We need that to survive and to do all the beautiful things we love to do for ourselves and our families with the money we earn. It is also that and many other reasons, that we need to maintain our health in good condition to function optimally, and to perform our life duties, whatever they may be. I would like to use the analogy of a car to explain a few points first, so stay with me, and come along for the drive.  Supposing l told you that the human body, is like a car in many respects, would that surprise you? The comparisons are endless. For instance, foggy car headlights remind me of foggy eyesight, which in many ways is cataracts. l see worn out tyres and l think, worn out joints or osteoarthritis. Fuel pump, filters, the car engine, etc. All of these remind me of similar functions in our body. And just like the car, we too have many parts, most of which have the potential of grinding the entire car to a halt if not serviced properly and timely. The breakdown might occur suddenly, even without warning. Every car owner understands the importance of paying attention to subtle changes in sounds or the feel of a car, to pick up the early warning signs that something is wrong. Prompt attention to these, particularly the check engine light, can avert some catastrophic events from happening and grinding the car to a halt. Just like a new car, a young person can keep going for years, all things being equal, without much trouble, but as we get older, things change and little things begin to matter. When we’re young and functioning at our optimum, it is easy to ignore general health maintenance, but here is where we have the most chance of significantly decreasing future risks of malfunctioning as we age. The rationale is so we don’t find ourselves facing certain major medical conditions that could have been totally preventable, if attended to on time.  People sometimes say things like “oh, he/she had a stroke (or heart attack) out of nowhere “. We know it is not always totally “out of nowhere”. It is often after months or years of ignoring little things just like the check engine light. These things often culminates into a major event.  Old people diseases are taking young people’s lives. The risk is even more so when there’s family history of diseases such as hypertension, diabetes, heart disease, certain cancers, often with genetic predisposition. In such instances we need to pay even more attention to those risk factors and manage them,  if we want the body to serve us for many more years and with less risk of malfunctioning. While we cannot change our genetic heritage, we can and should make every effort to live healthy and prolong the duration of our life engines. That being said, what needs to be done? What do you and I need to do to live a bit healthier, a bit longer? Here are a few thoughts. 1. Food/nutrition: l read somewhere “people today are digging their graves with a fork and knife”, or something like that. I will add hands, spoons and whatever tools we eat with. The point is, when it comes to health, what we eat is high on the list of things to prioritize.  When we think “good food”, for most people, it is often the unhealthiest meals that tend to come to mind. Foods that may be too sugary, too salty, too fatty, and too large in portions. Unfortunately, that is what’s considered as evidence of “the good life” to a large portion of Ghana’s population. Don’t get me wrong, food is a good thing and serves as the fuel for our engines. But eating too much of the wrong foods also clogs our system, making us unhealthy. Over time, we malfunction. Here, l am talking of red meats, fatty foods, excessive alcohol, too much salt, high carbohydrate or high-sugar foods that are eaten too frequently and often in high amounts.  Rather, you should try eating more green leafy vegetables, wholegrains, nuts, fish and less of the fatty, starchy, processed and/or sugary foods. This makes for a better function. The keyword here is moderation.  The idea is to make changes that affords us some comfort food but less of them overall.  Based on a person’s specific medical history, even closer attention might be required. For example, fruits are good, but fruits also contain lots of sugar and may not be a healthy choice for a diabetic, for instance.  Reaching for fast foods because we’re too busy may sound convenient, but in the long term, it does us more harm than any good. When it comes to food, it’s good to remember this:  if it’s not considered good for you, but you must surely eat some, then we must eat a lesser amount at a time and less frequently.  if it’s considered