hitting the wire*

Tripping Painlessly

There are few things in life I find more tedious than completing my tax returns. As a self-employed consultant I need to track a number of different expenses and differentiate between business and private; purchases, phone calls, kilometres travelled. Of it all, those kilometres are the ones that usually do my head in. I’m not good with logbooks, even when I had the book positioned so that I had to always move it in order to grab my sunglasses. Invariably I forget to complete it when I get back home and then I'm faced with gaps of days when I cannot recall where I went and when.  Yeah, my short-term memory is not great.

Come last week in August or Feb (c'mon, who does theiur tax early huh??) I'm cursing myself and my ill discipline.

For years, I’ve been wanting a logger - a device to plug into the cigarette lighter that would log my trips for me and categorise them to boot! Then about a year ago I spotted an electronic logging device that was designed with tax returns in mind. I procrastinated. Then I took fulltime employment and the need went away. Fast forward a year and I’m back working for myself…

So, before I ordered I decided to look around a bit. One or two things about the device had me a bit worried. For one thing, it had to be affixed to the dash with a cable running down to the cigarette lighter socket; not a taxi accident, but iffy. The socket would then not be available for charging phones and tablets. Very iffy. I looked at devices to ’split’ the socket into two or three; spaghetti of wires or clunky device. Meh. Then I read a warning that the device should not be left in the sun on the dash. Warning bells rang - I WOULD be forgetting this puppy on the dash and it WILL be one of those 35+ degree days. Not good. Otherwise it wasn't too bad. R899.00 including delivery.

Then Google turned up the GPSLogBook, for all I could see much like the other logger, but with a few distinct differences that meant a lot to me. One, the device itself plugged into the lighter socket - no wires. Great. Two, it clearly stated there was no need to worry about overheating in the sun. Better. Three, it has a USB socket in exactly the right place to accommodate cables to charge tablets or phones. Nice! R849.00 delivered.

Someone with some UX naus has had a hand in designing the website, although I have to say there’s the distinct impression that a bit of ‘copy-cat’ has been employed there if you compare it to the other logger’s site. Nevertheless, finding the info I needed was a breeze, and placing the order easy. Order placed Thursday, SMS to confirm they had received the order and manage expectations w.r.t. delivery. Another SMS on Monday to confirm delivery for the next day, delivery Tuesday.

Minimalist, neat packaging; sufficient instructions to get registration done painlessly and quickly. Time to plug it in and see what happens.

I have to confess to pulling it out after every trip to begin with, just to check that all was working. Now I have a reminder set on my phone for late Friday afternoon to prompt me to pull the miniUSB cable out of my laptop bag and plug the logger into my Mac. The Sync app wakes up and starts uploading the data to my account, after which I’m logged in and the week’s trips are there to be reviewed and any new destinations classified.

You can choose to identify a geographic “zone” as a circle with a radius of between 10m and 500m and classify it “business” or “private”. You can choose to draw out the boundaries of the zone as a polygon rather than a circle. You can choose to set a time limit for stopping in one place as defining the end of a journey to be anything between 3 minutes and 20 minutes.

By default, you are faced with a list of your latest trips, those that ended in defined zones, classified already.

(Don't ask about the movie trips... :/ - fortunately not a common occurence) 

A click on a trip pops up a map with a pin in the unknown destination. Clicking on that allows you to set the radius of the zone, draw a polygon to define the zone borders, name the place, classify it and add a comment about the trip.

A quick run through the unknown trips, classifying them and… reports, summary or detail, configured for SARS submissions or for your own purposes are there for the producing and printing.

This is not meant to be an exhaustive review and I have not played with any other trip logger, but this one is doing just fine for me. I’m even seeing logging trips as something akin to fun. OK, so not quite a barrel of laughs, but fascinating nevertheless. I guess it will wear off, but as the number of unclassified destinations reduce this is looking like taking a lot of pain out of my tax returns. I’ve also just realised that jobs which involve charging for kilo’s traveled are going to be just that much easier to bill.

Money well spent. Tax deductible too! ;)

The Mobile Tsunami

I came across a graph from a Business Insider presentation by Henry Blodget (their CEO) while hunting for some figures on smart vs 'dumb' phone growth.

This one struck me (although I still need to find out if the graph is "stacked" or "overlaid" (I suspect the latter):

Then when I found his presentation online, I was struck by this one:

Despite the amazing growth of smartphones, so-called 'dumbphones' or feature phones still dominate the mobile user base out there, especially in Africa.  This is the current situation:

MXit has a window of opportunity to consolidate its advantage in the feature phone (J2ME) market while it builds what has to be some awesome UX on the apps for iPhone, Android, Blackberry and Windows Phone phones.  The trend there is quite interesting; although Android is facing a segmentation issue which may well pull this growth up short.

Microsoft have pegged their hopes on their partnership with Nokia, but despite the assurances of a turned-around from Nokia CEO Stephen Elop in an interview with SA journo's recently, there are signs that they are stumbling out of the blocks.    

Maybe Africa will disrupt the whole applecart entirely!

Fun and games indeed. 

 

 

Facebook users - older, wealthier and more educated.

I find it fascinating how the use of various technologies shift as they move from early adopters through to mainstream.  I was aware that the demographic of Facebook usage had shifted from college kids to more older folk, I only have to take my own home as an indicator, but the figures in the infographic released by Online MBA tell an interesting story.  68% of 845 million active Facebook users are older than 35, with a fair number of them pulling annual salaries of $100k+. 

Goes some way to explain the frenzy around their recent IPO.

Apart from the colours used in the key being non-intuitive, the pictures make for some interesting insights.

 

Stellenbosch Free WiFi - first taste of the pilot

Did a few performance tests on MXit and Stellenbosch Municipality's fledgling free wifi service this morning. This was from near Mugg 'n Bean.

Not too shabby. Early days yet.

Looking up

“Whatever makes you nervous”

Apparently, that is Michael Jordan’s stock response when his golfing mates ask what they’re betting on themselves for the outcome of their round that day.  Mario Andretti is said to have stated: “If everything seems under control, you’re not going fast enough”. 
I’m hearing that right now.  I’ve stood at the base of “Oceans of Fear” on Klein Winterhoek, looking up and wondering what possessed Andy de Klerk to open that route - mostly on his own.  Some of the answers can be found in the book I recently borrowed from Gavin Marshall (who I used to climb with) called “Sharper Edges”.  There are times in life when it is prudent to back off and take a safer route, even if you’ve got a strong team around you.  There are other times when it just seems right to tackle something big and give it all you’ve got.

OK, having got all that emotional stuff off my chest, the reason for the butterflies in my gut, for the damp palms, for the rising excitement of a new challenge is that I’m at the base of a professional climb, heading back into “start-up” mode, but not with a typical start-up.  On Monday, I join the team at MXit.  No formal role defined as yet, no title, nothing nailed down - more or less the way I like it.  Anyone in the industry knows that MXit is at a tipping point.  Many questioned World of Avatar’s wisdom in buying the company recently.

A good few people I’m sure have written it off and some possibly even want it to fail. Most people think that BBM and WhatsUp have already eaten MXit’s lunch and are starting in on dessert.  They may be in for a surprise.

Some of the team there, like Gavin, I’ve interacted with over a period of years, some only as recently as last week.  There’s a sense of urgency, a sense of purpose, a sense of new life, a sense of possibilities rather than problems.  That’s not to say they’re drinking their own koolaid; they’re aware of the problems.  

I won’t go into some of my more spiritual & philosophical reasons why I believe this is the right thing for me right now, but this has the feel that Storm did when I joined two crazy Brits and their fledgling call-back company back in 1999.

I’m excited.  I don’t think this is going to be tame or easy, but it sure as heck is going to be exciting and either a total bust or a brilliant win.  
Let’s see about making it the latter!  

Do you Link to strangers?

LinkedIn to me has always been a handy, online, catalogued, up to date version of my personal network. A Rolodex on steroids as it were. I visit it when I'm needing to refresh my memory or mine my network for an intro to an individual or company. I've never dreamed of asking someone out of my network to 'link' to me, especially without an intro.

Lately I've begun to wonder if I'm out of synch on that. More often of late I am getting the equivalent of LinkedIn cold-calls; requests to link from people I don't know stating they are 'friends' and with no personal message.

Now it is easy to dismiss them when it is someone with little experience, a small network and there is no apparent value for me. The principle of "if I've never met them, ignore them" gets tricky when you recognize an industry figure, their network is large, the workplace a brand name and their role one which could indicate synergy.

I'm toying with a standard reply to these which goes something like this:
"Hi, seeing as you have not indicated where you know me from and I have no memory of meeting you, please give me some of idea of what mutual benefit you see in Linking my network on LinkedIn to yours?"

The problem with that is obvious, but not insurmountable: what do I do when one of my network requests an intro to someone in theirs? If there is a genuine link of some sort, I can qualify and vouch for the individual I know but not their network. In this case, not at all; I can just provide contact details.

I recall asking one of my network for an intro to one of theirs only to get the response "sorry, don't really know them, I just accepted a link to them once". Yawellnofine, that was useful.

I'm leaning towards the "if you and I have not at least done "coffee" or met across a boardroom table, phone line or a braai then I'm going to ignore you.

What about you? How do you handle those requests from strangers?

Some thoughts on preparing financial forecasts for potential investors

[I’ve been pestering an associate for some time to guest author a post on hitting the wire as I believe he has a lot of wisdom to share.  He’s a busy guy and I’ve nagged and bullied him for a good 6 months for this.  Zuko, many thanks for graciously agreeing and not blacklisting my email address!

After a few sessions of analyzing the financial projections provided by entities his private equity firm were considering as investments I suggested he compile some advice for those hopeful souls who embark on that challenge.]

Here they are:

Keep it simple:-  we have to be able to explain to others what you do and how you make money; real money – that stuff called “cash” – we’re primarily interested in the cash generation of your endeavour.  Who pays you? When? Why is your service important to your clients? And yes, who are your targeted potential clients?

Build from a foundation:- what is unique about your business? why is no one else doing it? or why do you think you are different from everyone doing what you do?

Show your logic/workings:- we have to see the IP, and then believe it really is worth something, we might not believe it is the silver bullet you think it is, get over it.  Prove it by stepping us through your assumptions and calculations.

Show your research:- why does client x need your particular service or product?

Be clear about your assumptions:- unless your business is going to show 25%+ returns over a 3-5 year period, you are not going to attract investors, however you shouldn’t try modeling with that as the input; be honest and realistic because we will hold you to those numbers. Granulation is key. Lots of spreadsheets that allow us to interrogate your logic are good; it shows you have worked on this project, a 1-pager ain’t going to get you money, but 400 pages of irrelevant data won’t either, so just be honest.

Use comments in the Excel workbook:- typically you will just have to explain your assumptions in detail, conservative is better than super bullish… call it honestly.

Be prepared to defend your model:- it’s your business: you have to have conviction, if you cant defend it you’re not going to get funded, period.

Admit your unknowns and know your limitations; its OK to admit these - you can’t be everything to everyone.  In fact, we’re often looking for a niche player, but a player who is really good at what they do and whose clients must really want their product or service. Ideally there should be long term contracts of 2-3 years. Ideally.

Don’t jump!:- Avoid projecting large jumps in growth in this year or next. Steps in revenue or profit are OK, even drops - just explain them! We like surprises on the upside, not the down.  We like to know quickly when things are not going to work out. We want alignment in terms of what bad results or lost contracts means, if it hurts us it must hurt you too and similarly on the upside. We don’t want your pain to be our advantage and visa versa.  Good alignment is vital.

Track record:- Show what track record you have that lends credence to the future trends you’re showing, be careful to be honest here, we will do reference checks!

Industry norms:-  Know them: growth potential, margins, etc. and state where your projections are bullish and why. Remember though that you don’t have to track the industry if your service/product is not going to do that, no substitute for telling it how it is.

Give us what we want to know:

• That you know your business.
• That you know your market.
• That you have done your homework.
• That you know yourself (your strengths & weaknesses).
• That your business has a good chance of growing to the degree where we can see a healthy return on our investment.

Substantiate:- We just have to uncover one area where you’ve used unfounded, unreasonable, unsubstantiated figures and we’ll begin to doubt the whole model. Then we wonder what else is misstated. We want to do this for the same reasons you did many moons ago, we like a good story, but we invest in things we understand and trust. It doesn’t have the change the world or mean something to anybody, but it must be a necessity to somebody and make us money.

Your skin in the game:- How much of your money/wealth are you risking? So what you have invested (by invested I mean hard cash) and how does this number relate to the number you want from us. If you are putting in 50% of the cash, great, the more even better! If less than that, then we’ll want more upside as we’ll be risking more. Then we also want to know or understand your balance sheet capability. Why aren’t you putting more in if you have money, especially if you expect us to put in 60%+ of the money?

No sweat?:- We are ok with sweat equity but that can’t be all your business is premised on in terms of goodwill unless you’re a Bill Gates (i.e. have a properly proven track record). So if 30% of your contribution is sweat to get the business to the level it is at, that’s OK, but the balance ideally should be cash (just like you want from us). It must hurt you too if this investment doesn’t work. We’re not big on personal sureties, but you must be on the hook and the best hook is cash.

We’re looking for a partner:- the chemistry must be there, you must be able to take us home - literally, if this business is important for you and your family then you should be telling your wife or confidant about us and you should be happy to have us as your partner. Look for things that we have in common, that’s what builds relationships.

What end?:- Think big - how big can this investment be? Build your business with the end in mind, how does this all end? For us, “heaps of cash when we cash out is pretty much our standard answer”. If you think Microsoft is going to buy this business you better have a silver bullet. Silver bullets are extremely rare in our view. For the rest we just want to know your business is sustainable and someone or some company will want to own it in the future, so you should be telling us who those companies are and why they would want it.

Numbers that makes us happy:- (and here I’m talking about PAPE) Typically in terms of return profiles, we want to invest R30-100m today on a roughly 3-5 PE multiple, meaning in 3-5 years we get all our money back. So that means at least at least 50% of the money we invest comes back in dividends or distributions in 3-5 years. In cash, ideally. It all comes back – that’s what a PE multiple tells us. Betting on the future beyond 5 years is not our strength unless you are a miner and have 20 years of reserves of a mineral that very few people have and clients who need it. In that instance we might even pay a 10x multiple as long as there is 15-20 year track record. So a dividend paying track record speaks volumes about cash generation, speaks volumes about alignment, we want you to want to pay out dividends, reinvesting free cash is important for longevity and sustainability but cash back in our account is also important and we hope it is important for you too.  We love investing alongside a guy, he pays himself and us a dividend every year or twice a year and then goes skiing or upgrades his car and house...that’s beautiful!  Then he starts buying back our shares... music! Then every two to three years he’s spotting the next best thing for this business.... brilliant!

On salaries, budgets, KPIs, etc. – salaries should be market related with 50%+ performance relate.  Don’t sandbag the budget! - we expect double digit growth on decent margins, this is a growth company right? KPI’s:- let’s keep it simple; we don’t really want to monitor staff turnover or how much revenue grew, we’re only interested in value creation (long term) and growth in profitability (short term). What you do with the staff, where you have your strategy sessions, where you take your clients, how fancy your reports are, etc. is your baby. You do what you have to do...keep it clean, keep it honest.  We don’t want to be sued and we don’t want to be embarrassed!

Sustaining the love:- If we sell the business and we’ve loved each other and typically the love is directly correlated to how much money we made together, and we find some other business, we will call you to partner and run the business and invest alongside us.  Remember, we’re not managers of businesses, that’s what you do well. The less we meddle when you doing your thing the better, if the company is growing and paying dividends we will do as you tell us, literally.

 ---

Dr Zuko Kubukeli is a quiet, unassuming, bloke with a PhD in Human Biology behind his name (although he’s more likely to be dissecting balance sheets than anything biological these days), a sharp mind and a nose for a good investments.  My interactions with Zuko have been as a technical consultant on due diligences commissioned by Pan-African Private Equity Fund of which he is a principal.  He can be reached on zkubukeli(at)pan-african.co.za

 

 

Managing Service Provider relations - inwards.

I visited a prospective client today.  When I arrived they were in the middle of a regular weekly event where one of the management staff gets the chance to present a motivational talk.  The Regional Sales Manager suggested I wait with her for a few minutes until the presentation was over when she needed to say a few words, after which we'd head off to a coffee shop for the meet.

She proceeded to call out two of the non-Sales staff who were in operational roles that can either make the lives of the Sales people a misery or a pleasure.  Both were thanked and complimented on the great service they were providing to the Sales department and presented with a box of chocolates and a letter which contained short motivational comments from every manager.

Compare that to the interdepartmental strife that I witness in other companies where the image above would be more appropriate.

Two boxes of chocolates, some time and effort in compiling the letters and a few moments to say "thanks" and I'll bet the ROI for the Sales department from more staff than just those two far outweighs the cost.

Sometimes it is the small things that count.

Simple Tech: "A litre of light"

I know this is supposed to be an ICT focused blog, but when I come across simple tech solutions I can't help wanting to share them.  Came across this clever idea the other day in the digital stream of info that rushes past each day.  

It's more of a skylight than a light, but what tickles me is its application for the poorer folk in any country who often live in dark and ill-lit places night and day because of the cost of the energy needed to shed light into their humble shelters.

Some ingenuity, an empty coke bottle, a few drops of bleach, a hole in a roof sheet that can be sealed against the rain, and hey-presto, some light and hope in a dark place.

Love it.

How accurate is your mobile data bill?

Calling all iPhone users!

The iPhone is known to be relatively greedy when it comes to mobile data usage (I've heard some people saying thath iPhone users use as much as twice the data that a Blackberry user does).  I'm sure that you, like me, are delighted to see mobile data charges coming down, but how sure are you that Vodacom, MTN, CellC or 8.ta are billing you correctly?

The other day, I came across Onavo and installed it on my phone.  It appears to be saving my lots of bandwidth, but then I noticed that it reports me using a LOT less 3G bandwdith in total than Vodacom is billing me for.  I proceeded to download a free app called Dataman and to reset the Data Usage counters on the iPhone's Settings (under General>Usage).

Tomorrow night I'll be resetting all three counters on my phone and will be comparing those with Vodacom's bill at the end of August.

 I'd love to have some other data to compare to, so won't you at least reset the iPhone counter and consider installing Dataman for a month?

I'll publicise anonymised results here in a post.