The business lessons I learnt through failing

Rocac Founder Humphrey Janji
NAIROBI, KENYA: We have heard countless times about how important it is to learn from our mistakes. To pick ourselves up when we fall. To try even though we might fail.

We quote Winston Churchill’s, “Success is stumbling from failure to failure with no loss of enthusiasm”, over and over to psych ourselves up.

However, no matter how inspiring the call to take a chance is, the fear of failing holds many of us back. Add the possibility of this failure going public, and we can hold off on our dreams to go into business for decades.

But unlike many of us paralysed by the unknown, Humphrey Janji, 24, didn’t let fear hold him back. Not even when he failed. He hasn’t let his missteps hold him captive.

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He speaks to Hustle about the lessons he learnt from taking the wrong road in his entrepreneurial journey as he built his company, Rocac.

How did you get involved in business?

I started my first business when I was in Lenana High School. I was part of the Junior Achievement Programme, or JAP, an international programme that teaches young people about entrepreneurship.

Students start with the programme in Form 1 and when they get to Form 3, they get an opportunity to start a company within their school community.

I wasn’t involved with JAP while in Form 1, but when I got to Form 3, I attended one of their meetings. They were trying to work out what business to start and they liked my idea of providing students with scarves that had the school logo on them.

As I walked them through my idea, the student who held the position of CEO stepped down for me.

Was this idea successful?

Yes, it worked out very well. We only had two months to make this work while competing schools had been working on their projects for six months.

We sold shares of Sh50 each to other students to raise capital and ended up with about Sh10,000. We used this money to make the scarves, which we sold at Sh250 each.

The school had 1,200 students and every one of them bought a scarf. We also sold them to parents during Parents’ Day, and even convinced the principal of State House Girls to let her students buy the scarves.

From the initial Sh50, we paid our shareholders Sh500, helped some students with school fees and won the overall competition in which 14 other countries participated.

And now you’ve started a coconut oil company. How did this come about?

I was sitting at home at the Coast with my dad. A young coconut fell and burst open, spilling the water inside.

I asked my dad why nobody had ever thought to package coconut water. I did some research and found that the machine required to package coconut water is very expensive – Sh30 million.

I then got in touch with the people at the Kenya Coconut Development Authority who explained to me that it was less capital intensive to produce coconut oil.

They gave me good advice, but I was 20 years old at the time and they didn’t take me very seriously.

Did you pursue the opportunity?

Yes, I did. I continued to do some research on where to get coconut and stuff like that. My biggest issue at this point was raising capital.

Although my dad liked the idea, he said the only money he was going to give me was for university tuition.

My brother was already at Catholic University when I pitched him my idea. He told me to bring some of these madafu from the Coast to sell at his campus.

My dad had a canter and I convinced him to let me borrow it, promising to fuel it and pay the driver. He also has a big coconut farm from which I collected the madafu I needed.

I took about 1,000 madafu to Nairobi and sold them all just outside the Galleria shopping mall. The same madafu that would sell at the Coast at Sh25, we were able to sell in Nairobi for Sh250.

The money we raised became the capital for my business, Rocac. This was in 2012.

How did you go about marketing your coconut oil

I set up a Facebook page and it got five likes. I, however, had several messages from people abroad looking to buy coconut oil. They each wanted about one to two containers a month, which is a lot of oil.

Because I couldn’t produce this by myself, I sourced for a supplier, committed myself to one buyer and once he approved the samples, I sent him a container of coconut oil, which was 18,000 litres.

Are you still exporting coconut oil?

No, I’m not. My export client gave me a second order of two containers, but I was unable to supply this because I was at the mercy of my supplier, who also had his own orders to fulfil. I was unable to meet the order deadline, so I lost the client.

The money I made from that first sale, however, gave me enough capital to break into the Kenyan retail market, and through online sales, the company became successful.

But then it went wrong. What happened exactly?

I was young and making a lot of money, so my priorities started shifting. I came up with this idea to have a party train to Mombasa and back.

We talked to Rift Valley Railways who told us that it would cost Sh2 million to hire the train. I thought that I would be able to sell 2,000 tickets and recoup my money, but that didn’t happen.

We only managed to sell 200 tickets, which was a huge loss for me and the company because I had used money from Rocac to fund this project.

What were the repercussions of your misadventure?

Things started to fall apart quickly because we couldn’t fulfil orders since we didn’t have cash reserves, and we began losing our customers.

During that time, the coconut craze had grown and there were new players in the field that we were competing with.

At this point, we had attracted two investors with whom we were in negotiations with. They had each agreed to pump in $2 million (Sh205 million) because of how big this industry is internationally. After the business started going down, however, they got cold feet and pulled out of the deal.

How did you recover from this?

We had to remodel the company and form partnerships.

We linked up with Jawabu business consultants who walked us through the mistakes that we had made.

I saw that I needed to pay myself a salary and not just pull funds from the business. On top of that, we had to set up proper working structures to ensure that the business was sustainable.

We had to build everything from the ground up, including our client’s trust, and because we didn’t want to again be at the mercy of a supplier, we also decided to go into production for ourselves. We sell our coconut oil at between Sh480 for 370 millilitres and Sh1,119 for a litre.

What are the greatest lessons you learnt from seeing your company fail?

Stick to what you know! What I knew was the coconut industry, and the minute I stepped away from that and ventured into an industry that I knew nothing about, things fell apart.

Also, if you’re looking to invest in a new venture, then learn everything you can about that industry before you put any money into it.

I have also learned that it’s not about avoiding the pitfalls, but learning to embrace them when they come, and overcoming the failures.

There’s no successful businessman who hasn’t experienced failure, but there are basic mistakes that an entrepreneur can avoid. You have to understand all aspects of your business to minimise running into problems.

Kenya Coconut Development AuthorityCatholic UniversityRocac