Africa: Emerging Opportunities and Exciting Business Lessons with John-Paul Iwuoha: An EOFire Classic from 2021

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. podcast network, the audio destination for business professionals with great shows like online marketing made easy. Today, we're pulling a timeless EO Fire episode from the archives, so the giveaway may not be active, and we'll be breaking down Africa, emerging opportunities, and exciting business lessons. To drop these value bombs, I brought John Paul into EO Fire Studios. John Paul is a business transformation specialist who helps entrepreneurs start, grow, and turn around businesses in Africa.

0:33In 2018, LinkedIn recognized him as a top voice on startups and entrepreneurship. And Fire Nation, today we're talking about how Africa is one of the top 10 fastest growing economies in the world. We're gonna be honest and sharing how doing what you love alone will not get you to success. Along the way, you have to do something you don't like doing as well. You take the good, you take the bad, the facts of life, Fire Nation, and so much more. And a big thank you for sponsoring today's episode goes to John Paul and our sponsors. Business Made Simple, hosted by Donald Miller, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

1:08Business Made Simple takes the mystery out of growing your business. Join my friend, Donna Miller, each week as he shares value bombs on topics like the secret to making better marketing decisions. Listen to Business Made Simple wherever you get your podcasts. Is now your time? Visit thrivetimeshow.com to see testimonials of how Clay Clark's business coaching has helped over 2 ,000 entrepreneurs to dramatically increase profitability. It's month to month and less money than an average minimum wage employee. Schedule your free consultation today at thrivetimeshow.com. John, Paul, say what's up to Fire Nation and share something interesting about yourself that most people don't know.

1:49What's up, Fire Nation? I'm almost on fire, not literally. I'm very excited to be here. It's been seven years since the very first time I listened to Entrepreneur on Fire and I've never really missed it. And I'm really excited to be here. One thing I have about me that most people don't know is, I think this started at 10 years old. And that was the first time I came across the term ambidextrous. I got to find out that it used to describe the ability to use both hands, the ability to use both hands, the right and the left hand. And it took me down a rabbit hole all these years because interestingly, I'm sure most people don't know, maybe just about 10 percent of the population is left handed.

2:34and there are very many exciting, interesting people who are left-handed. But what actually struck me was the way left-handed people have been treated over time. I'm naturally right-handed, you know, and I thought it would be cool to be able to use both hands because I was writing a bucket list of things I should be able to do by a certain age to be an interesting person. And I thought it would be nice to be able to use the two hands. But then it got me down this rabbit hole and I started to discover a couple of things. For example, in medieval times, people who were left-handed were arrested and sometimes burnt at the stake because they were accused of devil worship and things like that.

3:11The Romans taught us the art of the handshake. But one other thing the Romans taught us, the ancient Romans taught us, was the art of wearing the wedding ring on the left hand. But then the reason behind it is that the wedding ring is supposed to ward off the evil powers that are more or less stopped to come through the left hand. You know, things like that. Several interesting, for example, in the US, the very first left-handed president, James Garfield, was able to write with both hands. He could write Greek with his right hand and Latin with his left. In 1992, we had something very interesting.

3:44All the presidential runners from the Democratic Party, the Republican, and the Independent, Ross Perot, all of them were left-handed. Wow. That was George Bush Sr. and Bill Clinton and Ross Perot. All of them were left-handed. And then we had three consecutive US presidents who were left-handed. Ronald Reagan. We had Bush senior and we had Bill Clinton. Now, of course, Obama is left-handed. So very interesting thing. So I learned the art. I started with brushing my teeth with my left hand and boy, I caused a lot of damage, you know, in the first few weeks. But then I continued and continued for about two to three years and I mastered that.

4:22And then I moved on to writing with my left hand. And, you know, since then, you know, I got married and I was hoping I would have a child who's left-handed. I missed it with my first child, but then the second one turned out to be left-handed. And I see left-handed people as very cool people. And if you look at what they've achieved, most celebrities, Brad Pitt, Angelina Jolie, Hinoe Reeves, I could go on and on, Julia Roberts, many of them, Hugh Jackman, many of them are left-handed. And if you really look at it, they're just 10 % of the population. But then when you get to the height of achievement, from the highest office in the land to more or less the creme de la creme of celebrity status and all that.

5:02They dominated, but these guys are just 10 % of the population. And I think it's important in this age of diversity, where we tend to look at diversity through the lens of race, through the lens of religion and tribe and all that, it's important to remember that people who are left-handed are discriminated, even in today's, even though it's subtle. For example, in product design, golf clubs, cup holders in cars, at the checkout counters, most of those things are designed for right-handed people. And it's important to realize that we have this segment of our population who we don't really factor in.

5:38So for me, the left hand right now, somebody who can now use both hands, represents rebellion, represents creativity, represents uniqueness, and represents being special. So that's one thing I know most people don't know, but it's something I revel in that I'm now ambidextrous. I'm able to use both hands. Well, this is fascinating stuff. And Fire Nation, I'm sure from my little introduction with the title, which is Africa, Emerging Opportunities and Exciting Business Lessons. You did not expect that little rant by John Paul, but he's a very interesting guy. In fact, I get over 400 pitches every single month for the eight spots of Entrepreneurs on Fire.

6:17So it's quite difficult to get through my team and then even get to me and then to, you know, to go through the process and actually get selected. And his email was that special that it made it through all of these processes, got to me. And then of course, now we're speaking here today. So of course he was selected and I'm actually going to have my team go ahead and post that email because it's really cool to show you what can happen when you go above and beyond and get really personal and share some really cool things about yourself. So we'll post it on the show notes page. So if you want to see John Paul in action and how he ended up getting on Entrepreneurs on Fire after listening for seven years to almost every single episode, you're going to have to go over to the show notes page and check that out.

7:04Now we are talking about Africa and I want to know, John Paul, why? Why do we need to keep Africa on our radar? Very interesting question. So one thing that keeps me loyal to Entrepreneurs on Fire is the quality of stories and experiences of entrepreneurs who've made it. That's one big reason why I listen. And I'm also sure that's why many people listen to the show. But the interesting thing is, being an entrepreneur means that you're able to live in the now and also prepare for the future. So it's almost impossible to think about the future and not think about Africa. And here's why. When you look at the population of the world, Africa currently has the youngest population of people right now, 60 % of people on the continent are below the age of 25.

7:49So this is more or less looking at China before China became China of today. China, more or less the second biggest economy in the world, the factory of the world and all of that. So you can imagine that people who saw China before China became China are actually the ones who got in on the meat of the game. So that's exactly what Africa represents now. But more importantly, There have been events in the past couple of years that have put Africa in the centerpiece. The most recent one, which is very interesting, is COVID. Now, all this time, most companies have built their supply chains around China and Southeast Asia.

8:24But then when COVID hit, it was obvious that supply chains were very vulnerable. And if you're going to diversify your supply chain, it's impossible not to look at Africa. If you're looking at affordable labor, if you're looking at the proximity of the continent to either North America or Europe, and what are the means? Most countries on the continent either speak English or French. And these are more or less global languages if you're going to penetrate any of the big markets. And it's really now happening because what the Chinese are doing is the Chinese market is starting to specialize in advanced high-tech stuff.

8:59And most of those low-cost production that brought business, the whole offshoring from America, we're now beginning to see going to places like Vietnam, Bangladesh, and other countries in Southeast Asia. But then you cannot forego a population of 1.3 billion people, which is what Africa presents. And what we're now seeing is we're beginning to see some companies set up operations within the African continent, places like Rwanda, Ethiopia, Ghana, Senegal. and what they're doing is they are preparing these guys are digging in for the future and one interesting thing that's happened in the last four years in America is the pivot on Africa so in America when you think about Africa the image that comes to mind is charity and philanthropy Africa needs help and help and help so the approach of the Americans all this time and even Europe has been to help Africa give Africa aid give them all of that what the Chinese are doing is they're coming with more or less trade and business and things like that.

9:59So what Africa needs really, because you have this population of very young people, enterprising people. I didn't even mention that 60 % of the world's uncultivated arable land is in Africa. So in most parts of the world, we've maxed out the land space. Yes, we're using technology and other means to increase the yield on the land. But when we're talking about virgin space, virgin land, arable land, most of it is still in Africa, still not cultivated. And we're looking at a global population that is set to double by the time we reach 2050 or more, according to the UN. And if we do not keep pace with population growth, with the amount of food we're producing, then the world is going to be faced with serious threat of hunger.

10:44So these are just a few examples of why Africa needs to be on your radar. Yeah, so if you're thinking about now, it's great. But if you're thinking about the future, you need to remember that even before COVID hit, five of the top 10 fastest growing economies in the world were in Africa. These are not really things we see in the mainstream media. But why I'm happy things are changing is that the approach of the Chinese in Africa, though controversial, is a bit different. These guys come in here, boots on the ground, and they're dealing with the market. The previous relationship with Africa has been to deal with Africa's government, give African governments money, foreign aid, and they will develop Africa.

11:23And for 50 years, it's never happened. Instead, it's helped to enhance corruption, a sense of entitlement, and dependency. So most of the problems never get solved because there's free money, free money flowing in from Europe, free money flowing in from North America. So what people like us exist to do is to show that the people we should be voting for with our money is the entrepreneurs. They are the ones who have the incentive and the motivation to really solve Africa's problems. And guess what? Global money is starting to come in. I'm sure many of our listeners on Entrepreneurs of Fire know Stripe.

11:55He's a big global player in payments. Stripe just acquired an African company, a Nigerian company, for$200 million. That's a major exit. And it's stories like this that are starting to prove that Africa is not a charity case. Africa is an opportunity. The problems we're trying to solve through aid actually need to be solved through entrepreneurship. And in the process, we create more jobs, create more wealth, and create a bigger and happier world. John, let's talk about what you see as the most interesting opportunities that exist right now. I mean, you talked about a lot of opportunities. I love how you really are hammering home the fact that entrepreneurship is what is going to turn Africa around and really bring that continent into the, you know, as we move forward into 2021 and beyond.

12:43funds, but specifically, what are the one or two most interesting and fascinating opportunities in the business world that you're seeing right now? The first interesting one is food. And more or less, I touched about it earlier in terms of Africa's potential to produce food, because right now we're looking for the next food basket of the world. And one interesting thing that Africa offers is the area of what we now know as superfoods. So, for example, there's a grain that's grown in West Africa. It's a grain called phonio. Now, this grain is so rich in cultural significance. For example, when the tombs of ancient Egyptians are more or less open or excavated, amongst other materials like honey and things like that, phonio, F-O-N-I-O, is one of the grains that the ancient Egyptians actually put in the pyramids, in the burial chambers of their dead pharaohs.

13:40That's to tell you how important it was back then. This is like one of the grains that's been grown the longest in history, almost 5 ,000 years. Now, the reason why foneu is important is when you look at the American market and the European market, more or less developed world, and you see how important health and wellness is. This whole thing about eating organic food, gluten-free food, and things like that. You now start to see that a food like foneu is actually superfood. but in Africa is grown by poor people. In Africa is eaten by poor people. Then I start to see what America has done with a grain, a cereal like quinoa, which is more or less a breakfast cereal.

14:21Before quinoa became like a blockbuster cereal in America, it had the same profile as Fonio in South America. So what we're beginning to see is, for example, there's a celebrity chef in New York. His name is Pierre Thiam. He's now taking Fonio. He's packaged it, not just in its physical format, but in the narrative that's used to sell it. And last year, I think it was early this year, he got a national distribution across the United States in Whole Foods, you know, to distribute this kind of food. And Fonio is just one. I know many of your listeners may be familiar with Moringa, which is another superfood.

14:57It grows in the wild in Africa. We really take it for granted over here. But then we've seen entrepreneurs come in here and repackage it into something that's selling a lot because it resonates with the health and wellness movement, the big trend going on in the US. And that's really huge right now. So many people are really passionate about the superfoods and the quality of foods they're putting in their mouth. And that's why I love how you talked about how we're looking for the next food basket of the world. So that's really fascinating. So, John Paul, one more thing before we move on. One more opportunity will be solar.

15:32It will be impossible to talk about opportunities in Africa without talking about solar. For those people who don't know, more than 50 percent of the population still doesn't have access to the grid. And guess what? A lot of the money that Africa has been receiving over the last five decades as foreign aid has been to more or less provide this infrastructure. The problem is if you look at electricity through the conventional lens, where you need to have some kind of national grid that everybody has to then connect to, it's going to be almost impossible to get all parts of Africa connected because they're very remote areas, very rural areas and things like that.

16:08So the solar revolution that's going on in Africa right now is like a square peg in a square hole because people don't need to connect to the grid, which is very expensive. Just having a solar panel on your roof, we're not beginning to see important changes. People can stay awake for longer. Kids can do their homework into the night. Small businesses can stay open and sell more. And it's been growing like gangbusters. So the interesting thing about solar here is that most parts of Africa sits in the equator. So we don't lack for sunlight. We have like 300 plus days of free God-given sunlight every year.

16:47Yeah, you see? And then we don't need to keep digging up all these dirty fuels and things like that, even though up till now, many parts of the continent still don't have that. So these are local solutions to local problems. And I'm hoping later on in the interview, I'm going to throw some light because Africa really doesn't work as a cut and paste or copy and paste because there are some nuances to working on the ground because you have to tailor the solution to the problem on the ground, which is what I think this whole policy of foreign aid and things like that have been getting wrong. But the entrepreneurs on the ground get it.

17:22Entrepreneurs get it because they know there's an incentive to solving a problem. And if you don't solve the problem the way the market wants, the market won't give you their money. So those are exactly the foot soldiers we need on the ground to make the change. And it's not just Africans. We're seeing all sorts of people from around the world, particularly the US, Canada, and Europe come here to solve interesting and frustrating problems. See, this is fascinating. I personally love this solar revolution that's going on because it just makes so much gosh darn sense, Fire Nation. I mean, you know, instead of like stringing wires like across mountains and valleys and having the damage that's going to happen to that and digging up these dirty fuels that John Paul's talking about, I mean, why are we not just slapping a solar panel on somebody's roof and allowing them the natural sun to power what they need?

18:10I mean, it's fantastic. I can tell you about 12 months ago, I actually went solar in my house here. I have 41 panels and I have three Tesla power walls in my garage. So I'm essentially off grid. And it's just a great feeling that like right now, as I'm talking to you, John Paul, my entire house, everything that I do is powered by the Puerto Rican sun. And we also are quite close to the equator. We get a lot of sunny days per year. So it's very ideal. Why not use this natural wonder that we have? So Fire Nation, we have so much more valuable stuff coming up when we get back from thanking our sponsors.

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21:44John Paul, we're back and I want to talk about the biggest mistakes that people make when trying to do business in Africa. I mean, you just got to be, you know, nervous and a little trepidatious when you don't know what you're doing, which is why great. And we have people like yourself coming on who have experience, who have knowledge that can share with us what to avoid the biggest mistakes that people are making so that we can learn from those mistakes. I think the very first one would be, of course, Africa suffers from the impression problem. And it's important to understand where this is coming from.

22:16If you don't see Africa as a poor place, you don't have the incentive to more or less give donations and charity. So I think there's an industry that benefits from that perception. So the very first thing I need to get out of the way is, yes, Africa is poor, but not in the way you think. So anybody who's run a business before knows there are two ways to maximize profit. You can maximize profit by your margins, or you can maximize profit by your volumes. So guess what? Most of these businesses that are doing well in Africa are not working on the margin side, because many people on the continent just don't have the money.

22:48But on the volume side, Africa is huge. This is like another China or another India. Because let's use, for example, Paystack, the financial services company that was acquired by Stripe for$200 million. All they do is transactions. But then little percentages, 0.1 % of a transaction, just spread that out across millions of customers. Then you start to see where the money is. So this perception that Africa is poor, yes, it's correct, but not in the way that you think. And that's because you can still pull the lever of volume. And that is the secret to the success of many of the entrepreneurs we're seeing here, from solar to financial services to urban logistics to education to all sorts.

23:32So that is one thing to get out of the way. The second common mistake people make is they think, since it's a poor continent, since people just don't get it, since they are backward, let's go use what we have that works for us in the West or in China or in Asia and just copy and paste it on the continent. It doesn't really work that way. For example, one of the biggest innovations on the African continent is mobile money. Now, that is the ability to use your phone to transfer money and complete transactions. Mobile money is run on USSD, which is 2G technology. Right now, we're talking about 5G, but that is 2G technology.

24:09And African entrepreneurs have done amazing things with 2G technology, which is a legacy technology. In fact, that technology was exported to a place like Afghanistan. So during the US occupation and things like that, where Afghan soldiers had to be paid, it was that same technology that was still used there to make sure that people got their money on time. So here, there's a concept of frugal innovation that's been practiced here. It doesn't have to be the cutting edge technology or more or less AI or advanced stuff. We're still going to get there. But what Africans are very good at, especially its entrepreneurs, is being able to work with limited resources and achieving, you know, amazing things from that.

24:50So that's one other way. The third way is this distance doesn't help. If the only lens through which you see Africa is what you see in the news, then you're basically missing the script. So beyond tourism, it's important that when you pay a visit here, look beyond the safari and the elephants and the lions and all those things and really see what's going on. Because in my own honest assessment, that is one thing the Chinese are very good at. For example, I'm making this call from Lagos in Nigeria. If an American comes to Nigeria, there are certain areas, parts of town I expect they're going to stay.

25:26And that's, of course, there are many considerations, security and things like that. But when the Chinese come, they go into the hinterland. They actually go to feel the pulse of the environment. Yes, there are risks and things like that. But, John, I know you know that one of the keys to success in any business is being able to know your market. And you can know your market from a distance or through the news or what you watch on TV. You actually have to come feel the pulse for yourself. So, John Paul, you've learned a ton of business lessons from listening to Entrepreneurs on Fire over the seven plus years you've been listening.