Strive Masiyiwa: How I started Econet (Article One)

Strive Masiyiwa: How I started Econet (Article One)
Some Lessons From The Early Days: Raising Money From The Bank (Part 1)
Being a young professional bachelor, my little sports car was my pride and joy. I had tweaked up its engines, and it had its own unique colours, and when I drove it everyone in my hometown knew it was me!

One morning, I parked the car outside a small branch of a bank, and went in to see the bank manager. As I sat down, the bank manager remarked, “I like your car. Where did you get it? ”
We chatted for a while then we got down to business. I needed an overdraft for my small but growing business. I showed the manager the records of my deposits at the bank. I now had a big project, and I urgently needed an overdraft. “Do you have security?”, she asked. I had nothing.

After a while I exclaimed “What about my car?” “We cannot take a car for security, because you can smash it up tomorrow.” Then she said to me, “if you are really serious about going into business, sell your car. But you are not going to get a loan, from any bank.”

That was a Friday morning in 1986 and I am told not much has changed since. I left the bank, drove around in my car for the weekend and by Monday I had sold it! I sold the car and just about anything I could sell, and bought myself, a second hand “mini van”. I was not to buy a brand new car, for myself, for another 20 years.

Talking About Money: First Things First (Part 2)
The Bank Manager had turned me down for my first loan application. What was I to do next?

In the Bible, a great king, told his son, “With all thy getting, get understanding.”

One day I had the opportunity to discuss my problem of raising money from banks with a well established business elder. He listened for a while and then said to me, “you are a very good engineer, but you need to get a better understanding of how banks work; you talk about money and banking like a man in the street. It might get you into politics, but it will not help you succeed in business.”

After such a stinging rebuke, I don’t think I slept much that night, but I knew he was right:

Always seek to get deeper understanding of an issue first. Never accept that anything is as simple as it looks, in fact when something looks really simple, then you should approach it with caution, particularly if you have never done it before.

I could have railed in anger at the criticism that day. I could have told him I have a degree in engineering , and I majored in economics; or I could have argued with him and told him what I thought of the system. However, if I go to someone for advice, I do not argue with them or use it as an opportunity to show them that I am smart; that’s dumb! I knew that none of that mattered, I was doing something I had never done before and I needed to get “understanding of it”.

…If you have never done it before, get understanding.
…If you want to improve, get understanding.
…With all thy getting, get understanding.

Getting Down To The Business Of Understanding Bank Lending (Part 3)…
I began by drawing up a list of all the banks in the country, and all the financial institutions that provided any kind of financing for small businesses. I began to research every single one; I wanted to know everything about them:

* How much money did they have?
* How do they make money, as a business?
* Who managed them?
* What was their lending practice?
* Which one is considered accessible, and why?

It was a research project that I developed at a time when there was no Internet, and very little public information. I was painstaking and thorough, and it took me months. I did not rely on hearsay because I am always professional about what I do, I always check out facts.

I completely changed my circle of friends; hanging out with other young business people, and always asking about how they raised money. If I heard there was a business meeting, I always tried to get in, and I was always taking notes. I spent hours every night at the local university library. I had become a student again! Oh how I wish there had been the Internet in those days!

I bought books and read articles about financing of small businesses. I soon had a whole bookshelf on the subject. I bought books on how to prepare business plans, and how to make presentations. I had to wait for months for some of these books to arrive. This is how I approach most things: I do my research.

I had determined in my heart that if only $1 was going to be made available from the whole banking system, it would have to be to mine! There would be no “hit and miss”.
Some lessons from the beginning( Part 4): Excellence Will Always Get You Noticed

It had been quite a while since I sold my car to fund our working capital. My partner and I spent all our time just focused on our business. We worked long hours and drove around in a battered old pick up truck. We were totally consummate about our business. When I was not working, I was reading every book or article I could find on business, and business management; It was my passion.

Although my partner and I were both engineers, I had retreated from the engineering side to finance. The only numbers that interested me, then and now are financial numbers. I had come to realise that the most important thing in running a business effectively is through financial reports. This is when I started using the motto:

“It’s all in the numbers. Show me the numbers”

One day, I went to see a leading bank. Two years had lapsed since my first attempt at raising a loan. I submitted to them my proposal. The following day they summoned me. The head of the bank was present with his most senior deputy. They were both looking at my document. “Did you prepare this?” He was totally shocked by my presentation. He openly said to me, that he had never seen anything like it, and wished every manager in his bank would see it. “You have literally taught yourself banking, just to get a loan!” He begged me not to show it to another bank.

All that preparatory work had finally paid off: I got my loan….but I was already thinking beyond local banks…why not the World Bank?!

Raising Money From The World Bank (Part 5)
I told you that I read a newspaper with a pen in my hand, and I always have a notebook. So there it was, in the newspaper: the International Finance Corporation (IFC), an arm of the World Bank, was creating a small fund to help, small businesses in Africa!

We had no emails in those days. Using the principles I have already taught you, I set about on my deep research: I read about the World Bank and the IFC; I tried to get as much information as I could, in the days when there was no Internet; I spoke to friends in the business community, to get advice. Finally, I wrote them a letter, and surely enough within two weeks, I got a phone call.

Dr. Lawrence Clarke, was a young banker, from Guyana, working at the World Bank office in Washington. He had been assigned to the IFC, to find ways to help develop the African private sector. “I am coming to see you, in Harare”, he said in his booming West Indian accent…..This was my break, and I grasped it with both hands!!! Before he arrived, I was like a student preparing for exams. I crammed figures, statistics…. I knew my business.

Lawrence Clarke arrived alone, with just his computer, and he parked himself in my office for weeks. He went to see my customers and he visited my projects. He created models. I can still see him, a mountain of a man, who often worked in his shirt sleeves. I had never met such a consummate professional.

I got my facility of $250,000, in debt and equity….. From the World Bank’s private sector arm, called the IFC! It was like receiving millions of dollars in today’s money, and I was just turning 30 years old! That was 1990.Today, there are literally scores of funds similar to the one that the IFC had set up. These funds have hundreds of millions of dollars. The funds are looking for young people like some of you. It is my hope that some of you, have extracted some deep principles from what I have been saying, that will open the way to access these kind of funds.

Remember these three things that I have said to you before:

1. Attitude sets the altitude.
2. Every game, has its own rules, and its own language… Learn the rules, and language of the money game!
3. Yes you can!!!
One More Thing…

It was 1990, in just four short years I had gone from cobbling together $75 from friends and a relative to start a small electrical contracting business, to a burgeoning multimillion dollar, national business with almost 500 employees. I had learnt the art of raising money from banks, and had now secured an investment from The International Finance Corporation, an arm of the World Bank.

I had been named both Business Man of the Year and Industrialist of the Year. I was now sole owner of the business, as my partner had cashed out, and gone to establish his own business, before the IFC investment. We remain good friends to this day.

I began to think for the first time that I could tackle work in neighbouring countries, I chose Mozambique. So one morning, as part of my research into the opportunities in the country I visited their local embassy and spent several constructive hours with officials. When I left the Mozambique Embassy Building, I decided to walk back to my office rather than be driven. As I walked, I noticed a vehicle that appeared to be driving slowly behind me, but being deep in thought, I paid it no real attention. When I finally got into my office, two men rushed behind me, and abducted me at gun point!

I was taken to a secret detention centre by my abductors. Time and choice (today) constraints stop me from going into must detail about this incident. But let me say what is important; as I was in the place where I was being held and my abductors were outside, I did something I had not done since I was a child, I got on my knees and prayed earnestly to God, with tears in my eyes begging him to rescue me… He heard me! …. I was rescued from my ordeal that night!….

And now I had learnt the most important lesson of all… GOD ANSWERS PRAYER!

I came remarkably close to losing my life. We shall return to this issue again, my relationship with Jesus Christ, that is…..

God bless you, for following:

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