Lessons: The costly business mistakes I made

His father had been in the textile industry for years; in the business of extracting lint from cotton seeds. And together with his brother Tarun Shah, Vimal Shah (pictured) spotted an opportunity from his father’s business. That they could also extract oil from the cotton seeds. And the returns seemed better than in textiles.

A business opportunity identified, father and sons went into business together, setting up Bidco as an oil and soap manufacturer.

There was just a teeny-tiny issue. What looked like a gap to fill in the market, a need to meet, wasn’t quite that. East African Industries-now Unilever-was the big boy in the sector, and it would take tonnes of money, customer persuasion and luck to dislodge them from their lofty perch.

It was years of sustained dedication and unfaltering confidence that finally catapulted Bidco to what we know it to be today.

Vimal shares nuggets of wisdom, acquired through years of experience in business, to entrepreneurs and other business people:

1. Understand your operating environment

Bidco once had a soap called Saba Saba. When the brand hit the Tanzanian market there was opposition because in Tanzania Saba Saba has a strong political connotation. Saba Saba Day, on July 7, the country celebrates the 1954 founding of the Tanzanian political party, the Tanganyika African National Union (Tanu).

Similarly, a soap called Kuku in Kenya found market relatively unreceptive because the rooster drawn on it, the kuku, was misinterpreted to mean that the company was supporting the ruling party Kanu, whose symbol was a cock.
It was a learning experience for Vimal and his counterparts at Bidco, and they have been more careful with names and symbols since.

2. Start small and do it part by part

One of the most commonly cited source of frustrations for entrepreneurs is lack of capital. Or enough capital.
But after seeking funding from unwilling lenders with Bidco being a relatively small and unknown entity, Bidco went to The International Finance Corporation (IFC), and it was here that they were advised to start small, and to be content with a slow, calculated ascent.
“Start small. Inch your way up. In doses, keep going until you get there,” Vimal recalls. They followed the advice down to a hilt.  
Bidco thus started small, producing one tonne of soap per hour, 20 tonnes per day, 6,000 tonnes per annum. And the rest, as they say, is history.

3. Don’t be afraid to fail

“One of the biggest advantages of being an entrepreneur is that you can go back and do it again,” says Vimal Shah.
He insists that an entrepreneur could try something several times and reserves the freedom to fail, and try again and again, without going through the rigours of explaining to anyone why they chose a certain path.
Bidco bought machines to manufacture sachets in which they would package soap products, but the Kenyan market was unreceptive, people were used to rigid containers for their soaps and oils. The machines had to be kept away and by the time the sachet products were accepted, the company had to buy new machines,  since the previous ones were now obsolete.
In failure are critical lessons that become wisdom. And, yes, only after you’ve failed can you know what paths to avoid.

4. Be wary of misleading advice

Vimal, and his co-founders were misadvised into buying a Tanzanian company that would ultimately close down within a short while, leaving a sour taste in their mouths.
In 2004, Bidco ventured into IT hoping to reap big in a sweeping wave of technology and automation. But during the tendering process they learnt that they were expected to surrender up to 20 per cent of the worth of the tender they would win.

An investment complete with offices and workers was rendered functionless and closed down. It was a tough lesson to learn; that not all advice is good advice. 

5. Respect everybody

According to Vimal, bodily gratification is only short-lived and everyone should strive to feed their souls, and those of others. Unlike the body and the mind, the soul is immortal. Therefore, an entrepreneur or any business person should treat everyone with respect in the course of business.
It is a soft skill that not only maintains healthy relationships but also leads to a life of fulfillment for one and souls around him.

6. Unbox yourself

Believe in yourself. To discover your Ikigai, Japanese for a reason to live, one needs to unshackle self from the bondage of claiming inability.
There are so many roles one could play at the same time, and everyone has the ability to transition between them seamlessly, effortlessly.

Vimal says that he is a father, a son, a brother, a partner, a mentor, a mentee, among many other roles and he does not struggle to perform each.

Similarly, a person can do as much as they target only if they believe they have the capability and do not hold themselves back to the one role that the world knows them for.

 7. Stand by your principles

One of the main reasons Vimal Shah and Bidco refused to take the IT tendering offer was because they were required to pay a bribe, which is against the founding principles of the company, which they still subscribe to.

Over the years, says Vimal, some of their projects have hit a snag only because of the company’s unwillingness to bribe their way through. And he believes that had they compromised their values, they would have been long gone by now. 

8. Take advantage of age, and the resources at your disposal

He started young in business, and he thinks a 25-year-old now has all they require around them to make winning strides.

“The youth are living in the best time ever. There is the internet, new applications coming up every day, machine learning and artificial intelligence is getting better by the day. The 25-year-olds are in their sunrise: they have a proper 75 years ahead of them, and only they can determine their destinies.”

For Vimal, at 60, he is edging closer to an inevitable sunset, he says. “But the youth have to be ready to get out of their comfort zones. They need to unbox themselves and not restrain their potential. Limiting themselves by sitting inside a cocoon is never going to result in betterment.”

9. Make reading a hobby

You cannot make a good leader if you don’t read. And like every good one, Vimal reads. Among his current reads is Ikigai, and he brings a copy with him to the interview.

He reads a lot, it feeds his mind. And watches the occasional movie. And sings.
He aims to learn something new every day.

10. Don’t aim to retire, aim to step up

The Shah family does not retire: they step-up. “There are four levels in the business,” says the Bidco Africa chairman, “And we can only step up to the higher one when we are ripe enough for it.”

The four levels are operations, management, directorship and shareholding.

“In the eventuality you are a shareholder, and this is a level in which you could invest elsewhere. Here, you advise those below you. You have been there; seen it all.”

Operations is zero feet above ground, he says, where, in a plane, you could pick out dust on the runway. The management level is 5,000 feet, and the city buildings are well visible just below the plane. When you are a director, you are 10,000 feet up and the city could be picked out in its entirety from that vantage point.

“But at 30,000 feet, you have the whole country well in your view, and the city is just a point in it.” That is where he is to sit once he is not a director anymore.

11. Be flexible, and agile

It took Bidco little time to change from textile manufacturing to oil manufacturing. And to face regional giants, finally managing to get a foothold and create a market of their own.
Every entrepreneur should be agile and able to shift into a new trade when, and if, necessary.