How to put “Come buy without money” into practice – Strive Masiyiwa

When our operation in Kenya was still quite small, my team informed me that our largest competitor (a South African company) was planning to sell and leave. Their operation spanned several East African countries. There was only one problem: we had no money and no bank was willing to lend us the money required. 

Some people would have just walked away. But because of the knowledge I have about such deals from reading many books on business, I knew there is always another way.

“Let’s ask for a meeting, and try and establish what is driving their decision to sell, because this is a good market,” I directed my team.

So my designated negotiator went to see them, and he wrote down everything he heard carefully for me to read and study. After carefully studying the report, I gave a new instruction:

“Let’s offer them a merger of our business in Kenya in exchange for equity in the parent company.”

“Why should they accept that?” a member of my team interrupted, surprised.

“Offering them as a sweetener, a PUT after 18 months,” I continued. Then they understood and nodded.

Next step was signing an NDA. We then got access to their financial statements which I pored over with my team, looking for something, some “hidden treasure”...

__A balance sheet speaks 10,000 words to a financially-trained entrepreneur; that is why every entrepreneur must build financial skills, and not just hope to “wing it”! [For the #JuniorClass I added some articles on this in the Afterthoughts].

Having seen what I wanted, I could now formulate a clear winning strategy.

First, I offered them the financial statements of our own Kenyan operations, as well as its much bigger parent company that operated in more markets. I wanted them to have a clear picture about us, and our capabilities. I could do this because I fully understood why they had decided to sell the business from studying their own financials.

A few days later we had a deal. There was no cash involved. They became my partners, and we welcomed them to the board. A few years later they exercised their PUT. I had a bigger company to run. We both got what we wanted.

I tell you this kind of story not so that I can tell you how smart I am, but rather to teach you the power of knowledge. There is no mystery here; this kind of stuff goes on every single day and is a tool used to build up companies all over the world, including Africa.

It’s all about #Knowledge. Every spare moment, immerse yourself into understanding how business is done; it’s all there at your fingertips: books, TV shows, podcasts, journals, online research tools and courses. No day goes by, even after so many decades, that I don’t sit down to read or listen to some story like this on business. It's amazing what's available about business to listen to on podcasts now.

Studying is the most profitable thing I ever do. It’s a lifestyle thing!

What do you DO, after reading this blog post?

Please don’t ask me what a PUT is, but rather spend the rest of the day, or week even, researching and learning about it, then put it into your mental toolkit; someday you will hear of it again!

By the way: I did a similar deal in New Zealand and ended up with interests in the US and South America.

Now you know why I prefer studying business to watching football. [And most of you know, I do love football!]

For those of you who know the Bible, you will know where I got the expression “Come buy without money,” one of my favorite business strategies.

And when managing your 3Ps, especially as a young #Entrepreneur building your business(es), reflect and remember this advice from Larry Page [a co-founder of Google]:

"Always deliver more than expected"...