Thread by @ShoutsAndMiras

Story time! I gave a 10 (12?) min speech today for @gemstones_tmc. I typed it up this morning, practiced reading it out loud a few times, and managed to deliver the speech to a live audience with only a cheat sheet for help (hooray!). Here's the transcript.

Scientists love to argue about nature versus nurture. The “nature” argument makes the case that everything we are today and everything we will become tomorrow is all a result of our genetic background – it’s almost an argument about destiny.

If you’ve seen the movie GATTACA (which, by the way, I highly recommend), you will understand this argument perfectly.

The “nurture” argument, on the other hand, makes the case that our environment & the way we were raised – everything from the cultural context, to our nutritional intake, to the habits that our parents help us form – plays a far larger role in determining the course of our lives.

In my case, both nature and nurture have always been pointing me toward entrepreneurship. On the “nature” side of things, let’s look at my parents. My mother left her home country of Finland at the age of 21, to move to America and live with my dad.

She had known him for about a week. If that doesn’t demonstrate a high risk tolerance, I don’t know what does. My father, to his own credit, was pretty gutsy too. He’d come to America from India in the 60’s, for school.

After spending 20-odd years working comfortable jobs with stable salaries, he decided, at the age of 43, to leave the world of paychecks behind and start his own company. I was 4 years old at the time, and my brother was 9. This leads us to the “nurture” side.

I grew up literally inside a small business. My dad launched his company from the ground floor of our house. His office was my playground, the secretary was my babysitter, and the copy machine was my most prized possession.

I can’t count the number of times I got in trouble for stringing all the paperclips together to make necklaces for myself, or emptying the staplers and pulling all the staples apart. One year, my parents payed for my brother’s school fees using a credit card.

They didn’t have the cash when the bill came due, but they were confident that eventually, the money would come. I grew up watching my parents bet big and work hard, expecting the best from themselves and from everyone around them, including their children.

My own foray into entrepreneurship began at age 14. That summer, I opened up a lemonade stand. Now, selling lemonade in America is hardly innovative. It’s a tried and true method of exploiting your childhood cuteness for cash that’s been around for decades.

The basic premise is this: a grownup is walking, or driving, through the neighborhood. He/she sees an adorable small child sitting on a chair next to a plastic folding table with a pitcher of lemonade, a stack of paper cups & a homemade sign that says “Lemonade! 50 cents a cup.”

Grownups will say to themselves, “how cute,” especially if they know the child, and pull out some spare change to buy a cup. I wanted to go about this in an entirely different way. First, I broke down all the problems I had with the current, status quo model.

Location – these kids inevitably set up their lemonade stands on the street where they lived, and being residential, these areas were not going to attract enough customers to make the venture worthwhile.

Product – let’s face it. The product usually sucked. Either it was made from a powdered mix and overly sweet, or truly homemade and overly sour. It was also very hard to get consistency right from one batch to the next.

Business savvy – Fewer than 1% of the kids selling lemonade were footing their own bills for the lemonade, or the cups. And even if they were, I wasn’t confident that the kids were actually making money. In order to do this right...

you’d need price your product to be attractive enough for people to buy, while also enabling you to put money in your pocket after all the expenses. As a 14-year-old, I was confident that I could do this math, but I could see how these concepts might be tricky for younger sellers

Once I'd made my analysis, I plotted my moves. At 14, I was too old to be considered a cute little kid – I was an awkward, braces-wearing teenager. But I had ACCESS to cute little kids. I regularly babysat for a family friend who had two adorable, well-mannered girls, ages 6 & 10

What’s more, their apartment faced a beautiful, tree-lined street that hugged the river. The city closed this street down every Sunday during the summer months, so that runners and bikers and rollerbladers and walkers could enjoy a nice Sunday promenade. The location was perfect!

100's if not 1000's of people would be guaranteed to pass our stand, & what’s more, they would be thirsty from their exercise. I could sit somewhere off to the side & let the girls be the face of my enterprise. I asked their father if I could babysit them on the following Sunday.

(and yes, by the way, this meant I would be making money from babysitting as well as from the actual sale of lemonade). He said yes, to my delight! I told the girls about my plan, and we agreed on a 60/20/20 split of all profits.

Next, I had to tackle the product, cost, and pricing to make sure there actually WOULD be profits. I decided to buy bottled lemonade rather than trying to make my own. I found a bulk-store that sold organic, all-natural lemonade for $1.80 per bottle & paper cups for 5 cents each.

I reasoned that 1 bottle could fill 6 cups. If I sold at the standard price of 50 cents/cup, we could make $3 dollars per bottle in revenues. After subtracting the cost of the lemonade, cups, and ice, we’d still be clearing a dollar a bottle in profits.

I bought 100 bottles + cups & ice, with a small business loan granted by my mother. We were in business! On Sunday morning, we set up our stand, made a sign, discussed the operations (the girls needed training on how to handle cash, pour lemonade, etc), and waited for customers.

We were not disappointed! On that first day, we sold out in less than 2 hours. And we had fun while doing it! Though what we were doing, selling lemonade, wasn’t that innovative in and of itself, the WAY that we did it was. I learned some valuable lessons from the experience.

First, of course, was this: in order to run any business successfully, you have to know how much it costs you to make your product, how much customers will be willing to pay for your product, and how many customers you can reasonably expect to serve.

Second, you need to be fair to the people who are helping you to accomplish your goals: in this case, I made my two young friends into business partners, which at the surface motivated them to sell more, but at a deeper level made them feel equal and valued.

3rd, you need to recognize the privilege & helping hands that enable you to get where you want to be. If our family friend hadn’t said yes to the idea or if my mother hadn’t been able & willing to give me a pretty substantial interest-free loan, the business wouldn't have worked.

So how does this relate to what I’m doing now, 16 years later, 5,000 miles away? Well, the same principles that applied to my lemonade stand apply to my company, Tomato Jos. There is nothing innovative about what I’m doing. People have been making tomato paste for a LONG time.

What’s innovative is the WAY in which I’m doing it. Just like I did with the lemonade stand, before I dove into this business, I tried to understand the problems with the status quo. In Nigeria, there seemed to be a ton of moribund processing facilities all over the country.

I identified three main problems
Mgmt – many facilities had been govt-owned & were managed as cash cows rather than as start-ups, making it impossible to become self-sufficient. Others had been run successfully by wealthy men but with no succession plan, failed after their deaths

Raw material– the tomatoes in Nigeria are both poor quality AND expensive. This makes it hard for a processing facility to operate profitably. In order to make a product that can compete globally, the factory has to squeeze farmers into selling below cost, which isn't sustainable

Timing– tomato processing is done in what’s called a “continuous flow” production line. This means that rather than making tomato paste one batch at a time, you need 2 consistently feed raw materials into your processing facility, every hour of every day. A logistical nightmare!

I decided focus intensely on the tomatoes first. I thought it would take 2yrs to figure this out & then we’d move on to the next step of processing. So far, it’s taken me 5yrs to finally get a system that works for the commercial farm. We’re still tweaking the smallholder model.

Again, nothing I’m doing with Tomato Jos is that innovative – the innovation lies in the WAY in which we are tackling this problem. And as they say, entrepreneurship is 1% inspiration & 99% perspiration. The best ideas on paper will never make you rich if you can’t execute them.

When timelines double or even triple from your expectations, when an unexpected obstacle rears its ugly head, when you make a mistake or a miscalculation that sets you back, those are the things that people outside your company don’t see.

Often, you’re hiding problems because you’re ashamed of having messed up, or you’re worried that the failure of your actions makes YOU a failure. You’re afraid that admitting your shortcomings in public will make you less investible. Less desirable. Less entrepreneurial.

In reality, all entrepreneurs are failures. We fail at everything until we finally get it right. And the ability to fail, to learn from your failure, and to keep going, is what will make you ultimately succeed.