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

The meteoric rise of Zionfelix, GhKwaku, RonnieIsEverywhere, thousands of Instagram shops and tens of thousands of social media influencers are products of millions of Ghanaians running to the internet when the pandemic started. During the lockdown, the internet was inescapable. The impact of this on retailers in the short term has been divided. Those offering essential items such as food and cleaning products experienced high demand. But non-essential retailers such as those selling clothes and clothing accessories were forced to close stores or experienced a steep decline in sales. A year ago in May 2020, the Communications and Digitalisation Minister, Ursula Owusu-Ekuful, shut down certain offices for not adhering to proper COVID protocols. Since then, the Government and other stakeholders have been consistent with their message for retailers to have sufficient hygiene measures in place in stores all over the country. So for me, I expected the focus of the ensuing 12 months to be on clean shopping, contactless technology and improved hygiene measures becoming the norm, especially after witnessing some pretty significant pent-up demand for regular outdoor activities. To a large extent, Ghana did not disappoint. The rise of Zeepay and other local tech companies, twitter choosing Ghana for its first African base, Mobile Money integration everywhere and the steady embrace of venture capitalism all send the right signals. However, within an election year in a developing economy, COVID protocols gets trickier to enforce, plus the pandemic keeps having a toll on the economy. For an industry like that of Fashion, all these mean that customers will remain cautious about buying, whether indoors or outdoors. I think people will continue to be cautious and also value conscious for the time being about anything fashion.  Here’s why. Within the short time that Ghanaians were forced into lockdown, many of us spent more time online buying essential items such as groceries to avoid long lines at the supermarkets and to avoid the possibility of contracting the virus through contact with others. Other companies selling non-essential items, like clothing, also saw an upturn in sales through online channels but this was not enough to mitigate the decline as consumers began prioritizing and limiting their spending in the medium term. Online sales has since continued to grow but to a large extent the focus will remain on essential items. During this pandemic, people have either lost their jobs and there are many that have fears about the future. So don’t let the trending Instagram photos mislead you into thinking that people are not limiting their expenditure. Many brands in Ghana are shifting their focus either solely or more predominantly to e-commerce innovation and these technology advances will make online shopping experiences more exciting. For the local fashion industry, the immediate goal has been to provide competitive prices and a quick, efficient delivery for consumers. Beyond that, they need to think about how best to translate the in-store experience online and provide more forms of convenience such as contactless delivery and curbside pickups. Curbside pickup can be as simple as its name implies: your customers pick up their orders from a convenient location somewhere else other than inside the store, like the literal curb or a warehouse closeby. As innovative as that sounds, I am aware that it won’t be as easy to leave your customers orders on the curb for them to pick up later. But isn’t that why we have these discussions weekly? Is it not to deliberate and brainstorm and talk through our ideas towards creating meaningful change however we can and wherever we find ourselves? It is. And if it’s about trailblazing in fashion, one person I know that’s done that is Susie Bubble. Susanna Lau, also known as Susie Bubble, is a writer and editor living and working in London. Susie started her fashion blog, ‘Style Bubble’ in March 2006, and is now one of the most prolifically read blogs of its type.  Style Bubble consists of Susie’s thoughts, personal experiences and observations on fashion with a focus on spotlighting young and unknown talent. Previously, Susie was editor of Dazed Digital, the website of Dazed & Confused magazine, from 2008-2010.  She now works full-time on freelance content creation for brands such as Prada and Gucci and also writes regularly for publications such as Elle, Grazia and Guardian. She also sits on the experts panel for the LVMH Prize. Recently she has been actively involved in the #StopAsianHate campaign, getting involved with spreading awareness online together with other prominent Asian American designers and fashion professionals. She is currently working on a project to support ESEA women in the UK. During the lockdown, she has also co-founded a bubble tea and bubble waffle shop called Dot Dot in Stoke Newington in North London to explore her Hong Kong roots. The following is authored by Susie Bubble. ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ —- ♕ On how important one’s fashion is to entrepreneurial success. My own style has been pretty important to establishing both my USP in writing and I guess in terms of personal branding projects. I love young designers and experimental design and I’m not scared of colour and print. I think my style is open-minded and that in turn translates to the projects I do and the type of writing I do for publications. I’ve always wanted to promote fashion as a medium for self-expression on your own terms – not to please other people – but to please yourself! On where one can find and follow trending business wear. I don’t have a prescriptive notion of “business wear”. Those days of dress codes are definitely eroding and particularly post pandemic. I think it’s more important to feel comfortable in your own style and skin, whatever that may be. I feel most “powerful” when I’m wearing things that feel the most me – vintage Comme des Garcons pieces, Simone Rocha or Molly Goddard dresses. They’re not typical business attire but that’s the beauty of working for yourself – there is no dress code! On giving some tips on how to