Wednesday, April 22, 2015

Smart money: 4 places to invest your money this year

The second quarter has officially began and I am already feeling the economy speeding up. Around this time of year, I like to take time off to think of where to invest my money for that year. I am sure you can appreciate that amassing wealth happens over time and you have to continuously make the 'right moves' in order to witness an incremental growth every 12 months. By all means I could be wrong about some things because there are scenarios that we cannot foresee however when you analyse the current trends, you can also extract insights that can give you an image of what is likely to happen the following year on the money market. Below is where I am investing my money in 2015.

Real estate

In the previous article 'my top three predictions for 2016' I mentioned that next year is going to see a lot of change in structural distribution of wealth which hinges on the rise of the Y generation or millennials as the baby boomers (above 50 year old) will be looking to retire. Many baby boomers have empty nests because chances are, all their children have grown up and moved out of home. With some baby boomers deciding to migrate out of the city to the quitter parts of the country, this creates a good opportunity to buy their real estate because they will be looking to sell. A real estate boom is not only experienced when people's incomes increase but also when numerous homes are suddenly available on the market simultaneously.

Delivery services

This year, we are likely to see an incremental growth in smartphone usages which can only translate into abundant availability of internet based services, like Hello foods - where you can order food online for delivered to your address. What each of these companies will realize is that Uganda property is not well documented and available online. The only way to offer someone direction is by giving details of land marks, not addresses since we are still using the postal system. This increasingly makes finding places and people difficult. The company that will invest in digitally land marking areas, to offer definite directions will reap big by selling the information to the highest bidder.

Export business

The Uganda market is saturated with similar products or services and companies will start realizing the need to trade in other markets other than the home land. This also provides the advantage of earning foreign currency which in most cases is far superior to the Uganda shilling that is likely to decline drastically for the period leading up to the election season as a result of increased government spending. Keeping in mind that a  company makes profit when selling a commodity from a low concentrated market to a higher concentrated market. Think China to America.

Automated smart systems, research and development

When I started out as an entrepreneur in 2012, I realized that there was a lot that was going to happen with in the following years. So I started following the paper trails. It soon led me to start Xibra digital which develops mobile applications and smart system mainly for big corporations that are trying to reach the new consumer who has a growing fondness for singular tastes. In other words, individualistic products. This means that companies are realizing too, that they can no longer rely on the old model that preached putting out an Ad with a lucrative proposition for customers which would translate into sales and eventually profit.

This calls for reinvention of company procedures to achieve maximum leverage off technology which is helpful in making delivery of services convenient and more accurate because essentially, a smartphone's essential task, through the many apps installed, is to collect user information and patterns. This raw data is precious to companies that are looking to understand how their customers tick.

By following the money, it also led me to start Xibra capital which will raise seed money to fund some of these projects because I realize that ideas ride on the money train and this is an inescapable fact.

I hope this gives you an idea of where to invest this year. Good luck in your ventures and do give me a call if you have an idea worth embarking on.


Tuesday, April 14, 2015

Why organizations are going to find it increasingly hard to raise money

Kony 2012 made by the invisible children's charity organization which is advocating for the end of the LRA war, became the most viral video in a short period of time with 100 million views in just a few days. According to their financial records, the organization raised $26 million. However the film was criticized for overly simplifying a complex story and in turn, donations in 2013 amounted to a merger $4 million out of a budget of $15 million.

The organization which was started by Jason Russel and his two college mates announced recently stated that they will be closing down their operation. At their peak, they employed 300 people but now they are down sizing to 5 staff who will mostly work remotely on  advocacy work.

The invisible children is only one of the many organizations that are facing difficulty in raising funds to sustain their programs. Here is why I think organizations are going to find it increasingly hard to raise money.

Everything now has to be quantifiable

In the past, organizations received funding for their projects and in turn submitted a report that appealed to peoples emotions rather than their rationale. Which made sense because sometimes change cannot be quit quantified but the donors were happy as long as they knew their dollars were making somewhat of a difference no matter how vague that might have sounded. However, now days, donors are like investors, they like to see the return on their investment and an organization has got to be deliberately outline what their targets are, so that when they present an accurate report (hopefully), it clearly reflects against how they performed.

Priority in expenditure

About ten years ago when organizational work especially in this part of the world (Uganda) was high, it was a normal thing for an organization to buy cars, pay for high end offices and payout large severance packages to their staff, which made sense at the time because, for an organization to be credible, you must do all the above. However after the recession, it has become increasingly important for organizations to ensure their money goes the extra mile therefore any organization will understand that the only reason people give towards their cause is because it will benefit the end benefactor (usually victims). Therefore, now, organizations need to closely consider their expenditures, focusing most of their resources on their main purpose of existence which is their work because its what will speak volumes. Not the cars or well paid staff. And since donors are more stingy with their money (blame the recession) an organization has got to have its act together if it hopes to keep those dollars coming in.

Reinventing the story

Initially when an organization start out, it has a core cause to which they call upon people to be apart of and for the start it is exciting, however 5 years down the road and countless newsletters, it is not as exciting. Also keeping in mind that the people who would have supported the cause are like every other consumer who are bombarded with tons of information a day. An organization has to take on a business approach to marketing, to cut through the clutter to assure the donor why they should care about their cause, even after a few years. This will require organizations to create captivating and high impact media essentials that will resonate with their target audience.

For what it is worth, Invisible children is the perfect example for reinventing the message. Kony had been talked about for over 20 years so much so that all major world media houses had carried the story at one time or another. However IC was able to reinvent the message to reignite the fight against the war lord, using a modern day approach; social media. Other organizations should pick a leaf from this.

And good luck fund raising.

Tuesday, April 7, 2015

My Top 3 predictions for 2016

Shift of wealth and power to the millennials (20 - 35 year old's)

This group of people who have steadily be rising in management positions and growing their own businesses, is going to be the new middle class where the wealth is going to be highly concentrated. The explanation is simple. Millenials grew up in the era of technology which makes them the most tech savvy generation. Over time, millnials have been reinventing products in the market like Mobile mobile money to meet the e-commerce objectives. Eventually what is happening is that millenials have made solutions for their own generation and since they are currently make up majority of the working population with a disposable income, they are creating an ecosystem of their own that is going to warrant the rest of the population to leverage off their knowledge. Having the purchase power to propel a product to the top seller list is what's going to empower this generation.

Companies will therefore will need to figure out how to capture this market segment of customers, otherwise, ideas off the mill are going to hit the fan. The rise of the millennials also means that more baby boomers (60 -80 years) will be heading into retirement and this means companies who market products exclusively to this group of people will experience a hit at their revenue because of their clients dwindling disposable income.

On the political front, if the news is anything to go by, the youth are going to run the show. Finding the right message that resonates among them is going to be the key to winning the election. I am currently aware of  four of my friends who have made their political agendas known.

Increased expenditure will augment the incomes of young creative minds who have products that will put candidates ahead of competition. Let the games begin.

This is going to be the most fair election (So far)

Last year, through a partnership with United Nations Populations Fund (UNFP), Uganda finally carried out two major exercises that had been stalling; National ID card issuance and a National census. Which were both done in a space of two months, yet they had previously stalled for as far back as five years. 

But not this time. My assumption is that it is very important to President Museveni for Uganda to hold a free and fair election because it will play a pivotal role in defining our international and donor relations. And being able to account for citizens is the first step in that.
I reckon government workers will have to up their game to get complete pending projects because the president is clearly focused on legacy.

 The gay issue is going to dominate the agenda. The government will use it as a spin tactic and the opposition/independents will use it as the basis of their campain. This election will not be won by the the man with a plan (clearly we now know how that pans out) but rather the man who has a proven track record in being helpful to his community, which is going to pose an uphill battle for incumbents who are going to be put to the test to account for how they spent their term.

Explosion of the app industry

Great strides are going to be made in e-commerce this year which in turn will grow the number of people who opt for online payments. Factoring in the projected exponential growth of smartphone and internet uptake, companies are going to realize that they need apps in order to provide a refreshed online experience for their products and services. And if the app built for president Museveni is anything to go by, politicians are going to look to the tech industry to develop products that will put them ahead of the contestants. 

And since app are a technology mostly used and built by millennials, you can understand why this class of people's income is going to exponentially grow.