Last week American car company Tesla saw its share price hit $500, a record for the company. With that price the company’s market valuation rose to about $100b (more than three times the size of the Ugandan economy).
The 30 percent jump in share price since the beginning of the year, means Tesla is now bigger than establishment companies Ford or GM, which were the biggest car makers in the US. Tesla will be 17 years old this year.
These are impressive figures by any measure.
The company wins a lot of attention thanks in no small measure to founder South African born American businessman Elon Musk, who is not averse to getting his foot in his mouth every so often.
It was created with a desire to bring an electric high performance vehicle to market. Up to that point car manufacturers struggled with the low capacity of available batteries, which would not allow high mileages.
After many missed targets, Tesla it seems, has found its groove and is set to take advantage of the first mover advantage – sort of, to dominate this new sector.
But what is it that drives entrepreneurs like Musk, to take on establishment companies, disrupt the status quo and come out the other side triumphant?
Last week we serialized the book , “Double your money” the very engaging memoirs of our very own Aga Sekalala Snr. As a businessman, he is unique in that his enterprises have not only survived, but thrived over the last four decades and sometimes under very harrowing circumstances...
When he first went into business for himself with a fuel station off parliament avenue, there were hundreds or even thousands of other businessmen who started with him. Most have left no impression on our lives or memories.
To endure like he has, has not been easy. I think the book understates Sekalala’s struggle, but its possibly a function of the old man’s mentality to not dwell on the past, but to get on with the job at hand. My impression was that the simplicity and unpretentiousness of the man belie a spirit, which while ready to adapt to changing times is encased in an iron will determined to bend circumstance to his bidding. So how did he do it?
The problem when we come in contact with these giants of commerce and industry is to see only the finished product. But the physical is the manifestation of the intangible – the vision, the strategy, the discipline of execution, the company culture.
I think everything starts with the vision. The vision of the founder or managers of an enterprise will determine how big the endeavour can be.
In the first half of the last century a small boy determined to go to school, because he liked how smart the teachers looked. He thought he would be a teacher. Then his ambition grew when he saw the county chief who in addition to being smart, rode a bicycle. The only bicycle for miles around his village. Then he decided he had to go to university, because the one university student he had seen was not only smart, but had an air of confidence and worldliness he wanted for himself.
His contemporaries who didn’t upgrade their ambitions or the vision of where they saw themselves in the future, ended up reaching their limits quickly and falling by the way side.
From the analogy a vision not only has to be bigger than the individual or company but also has to speak to the emotion of the holder. It’s the emotion that welds the vision to the psyche, taking over the owner’s life and driving achievement as if by magic...
Under such circumstances the subconscious can hold the dream long after the individual thinks he has forgotten about it.
That is why you can visit a company and it is humming along like a fine tune race car, but there is no evidence of a vision or mission or values statements pinned up on the wall. But the vision can be discerned from the work ethic, what values the company lives by and the achievements over time.
A deep dive into the mind of the founder or the company’s boss may help.
And this is at the root of why we are one of the most entrepreneurial countries but not one of the biggest economies of the world.
We are predominantly necessity entrepreneurs, setting up business to sustain our families. This is not a crime but it limits how big the business can grow, how much it can produce, how many jobs it can create, how much tax it can pay. Because they stay small the first shock – economic, family or otherwise, they experience lives the little chance of survival.
To start a business to feed yourself is not a crime. Most companies start that way. The trick to the creation of long term value for the owners and the communities in which they operate is to make the transition to opportunity entrepreneurs.
As opposed to the necessity entrepreneurs these are driven by opportunities they can take advantage of, are keen to build systems in order to scale up and maximize the chosen opportunity.
"It is near impossible to grow without systems and structure. But to invest in building these requires a long term perspective that does not reside in a necessity entrepreneur...
Elon Musk’s dreams were driven by science fiction and his determination to explore space. His vision is bigger than electric cars, but in the process he is drugging the automobile industry kicking and screaming to places it did not envisage.
Many years ago when Mzee Sekalala was exploring getting into fish farming, and narrating the challenges he was encountering, I wondered why he was even bothering there was still plenty of growth in the lines he was pursuing – poultry, vanilla and animal feeds.
His response, “If I hadn’t gone into chicken which chicken would you be eating today?”
Enough said!
