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Ryan Petersen's Blog

Della Bradshaw's second article about my trip to Nigeria just came out in today's Financial Times.

I've also got a new post on the Columbia Business School blog out today.

Labels: Africa, Columbia Business School, Nigeria

Over the past decade, leading African business schools have adopted the traditional case method. But how much can students really learn from these cases when they are about American companies that routinely leave Africa out of their operating plans altogether?

So during winter break, I was one of 30 CBS students who traveled to Africa to write case studies about successful entrepreneurial businesses on the continent. (See previous posts here and here.)

Our goal was to develop a world-class business school case study about Computer Warehouse Group (CWG). This project presented the opportunity to dispel the myth that there are no sophisticated businesses on the African continent--or worse, that businesses there can only get ahead through corruption.

We knew only that the firm had experienced explosive growth over the past few years, achieving some $100 million in revenues in 2007. We knew the firm was an early reseller for Dell, and that it was an important partner for a variety of blue chip Silicon Valley firms, including Cisco, Sun Microsystems and Oracle. We understood CWG's strategy to position the firm as a strategic partner capable of delivering turn-key IT solutions for big companies, and we knew that a well-known global private equity fund had made an offer to purchase a minority stake in the company.

And until we got to Lagos, we didn't have any sense of this company's culture. Was it a one-man show, heavily dependent on its charismatic founder, Austin Okere? Or did it have people and processes in place to ensure continued growth into the future? Did employees at the bottom live the values expressed by those at the top? Or was it more of a show to impress customers, potential investors or other stakeholders?

To answer these questions about the company's culture, we interviewed dozens of employees, from the most senior management to the most junior customer service and sales teams.

As it turned out, we couldn't have picked a better company to lay these stereotypes to rest. The company has thrived in difficult circumstances because of an entrepreneurial culture that embodies the work ethic, personal responsibility and integrity of its founder. The firm has distinguished itself from the competition by consistently delivering on promises to customers and is one of Nigeria's 50 fastest growing companies.

A rep from Cisco told us that the firm is "probably the most entrepreneurial company in Nigeria, certainly in the most entrepreneurial in IT sector." The founder of the competing firm, who has since sold his business to a larger international player, expressed similar respect for his former rivals.

Labels: Africa, Columbia Business School, entrepreneurship, Nigeria

Roben Farzad, Business Week's Wall Street Reporter, recently visited Nigeria and put together a great article, slideshow and podcast for the magazine and its Web site:

Article: Can Greed Save Africa?
Podcast/Slideshow: http://images.businessweek.com/ss/07/11/1129_nigeria/index_01.htm

I was privileged to join Roben and a group of leading investors in Africa for a dinner organized by the professor I work for, Paul Tierney, Jr.a few weeks ago when he was returning from the trip.

Labels: business, Columbia Business School, Nigeria

Austin Okere, founder of Computer Warehouse Group, on the need for an entrepreneur to maintain control, make quick decisions and seize opportunities.

“You need the speed of light to make a decision. I talk about [growth] as intrinsic opportunity which means you can’t say now this is my budget and my strategy for the year and then that’s it.

That’s the difference between being an entrepreneurial-minded person, I think, and someone who is more managerial. You know you give [a managerial person] a blueprint and you run with it, but you wouldn’t know what opportunities he has missed along the line if you are doing what you are doing.

Our growth has been exponential because of these opportunities that we constantly take advantage of which we probably didn’t see at the beginning of the year when we were doing our strategic plan.”

Labels: Africa, Columbia Business School, Computer Warehouse, Nigeria

I have been selected to write a business school case about Computer Warehouse, a Nigerian IT consulting firm. Along with an all-star team from Columbia Business School (featuring two Nigerians and a Czeck guy), I'll be heading to Lagos in mid-January to collect data and conduct a series of interviews with stakeholders.

Stay tuned for updates on this exciting opportunity.

Lagos, Nigera
(picture courtesty of Swedetrack.com)

Labels: Africa, Columbia Business School, Nigeria

Tom Barry, founder of Zephyr Management, one of the early pioneers of private equity in Africa, visited our course on Entrepreneurship in Africa this week. He spoke to us about his involvement with the first private equity fund in Nigeria, Capital Alliance, and the difficulties behind that fund's first investment.

Capital Alliance bought a 25% stake in GS Telecom, a business to business network solutions provider offering satelite connectivity for banks, mining and oil companies throughout Nigeria. Tom says one of the mistakes made on that deal was that the negotiators at both sides of the table spent too much time focusing on the percentage split of the pie, and not enough discussing whether their equity infusion would provide enough cash for the firm to truly prosper.

As it turns out, the business (renting satelite networking equipment) was far more capital intensive than they ever imagined. They had to constantly go back to the capital markets to raise more money--both equity and debt. Perhaps as a result of insufficient capital, and to the difficulty of the Nigerian business environment, the firm was not able to meet its original financial projections.

The firm got stuck at about $25 million in revenue for a number of years, and Capital Alliance did not exit their investment until nearly a decade later. Although they made a 3x return, the long time horizon and the high risk environment meant that the investment did not meet the required risk adjusted returns. But it was a great learning experience and a reasonably successful first foray into private equity in the Nigerian context. In the end, it would be enough to encourage investors that there were genuine possibilities and helped lay the ground-work for future successes.

As professor Murray Low says, private equity and venture capital is a lot like pinball. When you win, what do you get? More balls so you can play again!

Labels: Africa, entrepreneurship, Nigeria, private equity