Ep468: Emmanuel Michael – Test Your Market Before Starting Your Business

Andrew Stotz 00:02
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community we know that to win in investing you must take risk but to win big you've got to reduce it join our community to claim your podcast listener discount on my valuation masterclass Boot Camp, where students learn how to value companies like a pro and advance their career. Go to my worst investment ever.com to join the community for free. Fellow risk takers. This is your worst podcast host Andrew Stotz from a Stotz Academy, and I'm here with a featured guest, Emmanuel Michael or let's just call him E M. M. Are you ready to rock? I'm ready to rock and roll. I love it. I love it. Let me introduce you to the audience. Emmanuel Michael. Leadership and career success coach is a season and highly sought after strategic business leader with over 20 years management experience spanning various industries, such as multidisciplinary engineering, information technology, hospitality and financial services of which over 17 years have been in human resource management practice. Between March and August 2017. He held forth as the interim CEO and head of HR at let let's say Co. Leslie Leslie go MFB a national microfinance bank in Nigeria. He is currently the head of human capital there. Emmanuel is also the founder and host of HR with em a platform to connect, learn and share on everything leadership, career development, and employee experience. He is fondly called the HR celebrity by the Nigerian HR community. Em, take a minute in filling for the tidbits about your life.

Emmanuel Michael 02:00
Okay, thank you very much, Andrew. That was a long intro. Okay, so what is missing bed now is a marriage of married and then I have a set of triplets. They were born 22 months ago. So October 2019. Wow. Triplets. Two boys. One lovely, beautiful. Yeah. So

Andrew Stotz 02:25
you and your wife decided we're just gonna do it all in one. Yeah, it was

Emmanuel Michael 02:29
and then does it. So that is something that I would like to share. So for the audience to know which I must be done, some do, but not all, too. So. So that's something that is missing there in that bag. What, and it's been lovely, a great experience, trying to bring them up, you know, everyday, I learned something new with the way I interact with them. So it's like, building a business I shared recently about the patients that you need to bring up these children is like the same kind of patience, you need to bring up your business. So when we talk about investment, you also need some sort of patience to get the investment to grow. So let's get it.

Andrew Stotz 03:11
I mean, it's hard enough to be a father of one kid at a time. Yeah. Yeah, have three come along,

Emmanuel Michael 03:20
at the same time demanding the same thing. This man is the same energy. Times three everything you do.

Andrew Stotz 03:29
What? At what point? Did you know that it was going to be true? Did you know her?

Emmanuel Michael 03:36
Yeah, from from when they were conceived. So we attend in hospitals. And then from time to time, we did a scan. And we're told, initially, we were told you were going to be for No, and then somehow did another test and the doctors were doing the test. It looks as if it's three nights no longer four. So we're still excited. We're looking out for too, you know, so God decided to give us extra so that we don't have to know more. So that as it so we started planning from the onset, when we knew they were going to be three. But we didn't know the agenda. So I kept insisting I need to make sure there's a baby girl, there's not just only boys, you know, I love baby girls. Eventually, God blessed us, there was a baby girl and the two boys.

Andrew Stotz 04:29
Fantastic. Well, that's exciting. And that's a cool thing to learn about you. And now it's time to share your worst investment ever. And since no one goes into their worst investment thinking it will be tell us a bit about the circumstance leading up to it then tell us your story.

Emmanuel Michael 04:45
Okay, so sometime in 2000, the year 2000. If I had worked with this multidisciplinary engineering company, and there were some challenges, business was not good. And there was need for me to start looking for something else to do. So, early 2000 SRF, thinking of what to do before then, I used to visit the United States Information Service. That is what it was called then in the northern part of the country where I was resident, just to go and see what sort of business ideas because I've always wanted to do business so I can be sitting there. So I got some ideas. I got information about a company that deals in locks. So I made contact with a company that is in locks, and I started looking for how do I sell these locks in Nigeria. So in 2000, when we had a challenge you the Commodore was working for, business was no longer ongoing. We had to start looking for opportunity to find something else to do, and started to say, Okay, I think this is the time for me to now focus on these locks business. So I had saved up some money from other activities that I was doing. So I saved up quite a good chunk of money. I started to say, let me go full blown into this business. So what did I do? I placed an order for some of the locks okay to be delivered. Then I went out to look for an office space. I got a very beautiful office space, they had like a showroom in front we I can display the logs, I had all these beautiful displays times that will showcase the logs though. They were bicycle logs, then car logs, those were the different type of cable cable locks or cable locks or bicycles, for motorcycles. And then for cars. So I got the order arrived. I displayed started looking for markets. So I started looking for market after I've received the order, got my office space, then I tried to do some odd then I said I'm going to visit a car companies to see if they will agree to buy the car lock because this panel, okay, so where did that was when

Andrew Stotz 07:13
you broke up there. So you were saying that you went to visit the car companies to see if they wanted to buy the car, lock them with them with him, okay? No, I can't that's

Emmanuel Michael 07:23
okay. So I visited car companies to see if they could buy these catalogs and install them in their cars, such that when customers come to buy the cars, they would sell the catalog as part of the accessories Okay, with their car. So that was what I was asked let's look into several car companies. Okay, so the like of break.

Andrew Stotz 08:02
Alright, hold on, I'm gonna turn off my video for a second, let's turn off our video for just a minute. And we'll try to cut down on bandwidth. So let's go. Let's go back to the point that you said I'll edit out the other part. Let's just go back to the point that you went to the car companies and start from there.

Emmanuel Michael 08:25
Okay, so I visited the car companies to discuss with them to see how they can sell the car lock, the pilau car lock as part of the accessories, okay. So that whenever a customer comes to buy the car, this car lot will be included as part of the accessories to be sold to their customers. That was my intention. And that was the positions I was having with the car companies. So they all showed great interest. But at the end of the day, what I discovered was that it didn't really happen. So maybe you get them by 12345. But I had a large stock of these catalogs had a large stock of the bicycle logs and a motorcycle logs. So I also tried to look for car dealer, I mean bicycle dealers, by school dealers, motorcycle dealers, to see if they can also include it as part of the accessories that they sell to their clients. So that was basically what I did. When I saw that it wasn't moving. I decided to then go ahead, hire some sales agents who will go from shop to shop to see how they can sell the locks. I engage them on commission base. So if you sell you get a commission paid for what you're able to sell, so they did quite some small sales, not as much as I wanted. And my rent was running. So the money that I had invested in the red carpet for two years rent in that particular establishment in that Shopping Complex. Why business complex. So I stayed there. At the end of the first year, I was not able to generate enough revenue to even pay the first year ends. Okay, so which means I'm not able to recover, then we continued up until the end of the second year, teams were getting worse, instead of getting better. They were getting worse, and I couldn't recover my money. So I sat down to look at what have I spent, only to discover that as at that time, if we convert the naira that I spent was over two points 5 million or so that I've invested in setting up the place, and then outside the cost of even important the product, so close to about 30 to 30,000 US dollars as a den in 2000, and a lot of money, a lot of money over 20 to 30,000. If you convert that in today, it's actually very huge amount of money in Naira in today's exchange rate because the exchange rate then was about 100 105 Naira to $1. And today, you have about 500 Naira to $1. So that will be five times if we're to convert that value to the five times our value, that was exactly what I lost. So he got to the point that because I couldn't generate enough money, I spent 24 months there, not enough money, the rent expired, the landlord now came to ask me to either renew the rent or move out so that you knew the rental, and I didn't have money to renew your rent. So I was battling with looking for money to pay my house rent. Now I'm battling with looking for money to pay for the office space. That was a very big challenge. What do I do? At the end of the day, you know, the worst thing that happened was that I was actually ejected from that premises, ejected in the sense that I couldn't even retrieve my the remaining part of the goods that were in the in that space, I couldn't retrieve them, because I couldn't pay the rent. So the landlord said, Okay, since you unable to pay the rent, I'm going to keep hold on to your properties, the furniture was the remaining balance of the locks that were there on to be able to raise the money. And so at the end of the day, I just told the landlord, okay, maybe what we need to do that you can take them, sell them off, when you are able to sell them off, you can give me whatever difference that you made. That was how do so I really lost so much lost money, lost the properties that we did, because I couldn't get them back. And I was far back in 2000. So after that, I had to now began to instead of dream business, I said to myself, I think maybe it's not yet time for me to get into this kind of business, maybe I need to look for a job. So that was when I started looking for formal job. So that's maybe if I need to get into business, I need to do something different from what I've just done. So what did I learn from these experiences? Yeah. So that's basically the story. So I really want me to share with you what I mean.

Andrew Stotz 13:29
Yeah, I'd love to hear how you summarize what you learn from that.

Emmanuel Michael 13:33
So when that happened, I sat down. You know, he got to a point when these things were going on, I was somehow depressed, okay? Because my hope was that when I started the business because of the excitement, you know, I believed that everything was going to go smoothly, I was going to begin to make money and I will be able to stand on my own. But when he didn't wanna get away, I somehow was slightly depressed. Okay. But somehow, I guess because I'm a very spiritual person. I kind of prayed about it. And somehow I had some peace, and I started going out to look for a job. Luckily for me, I said, let's share with people that I need a job because since we're no longer as rosy, my savings have depleted by dollar value, and I didn't have any morning. So somehow, I finally got a job. I finally got a job which was how I moved into HR. So I got a job in HR. But the lesson that I learned from that was that when I look back, what are the mistakes that I made that I did not first of all, kind of size of the market to be sure that these people that I want to sell to will be willing to take on the product and add it as part of the asset race, you know, to sell their cars, yep. If I had known that they will not readily accept, maybe I would not have invested that much money, then the only thing again, is that I could have operated from my home, you know, instead of going to rent a fancy shop, my expectation was that when you have this fancy looking office, everybody will just keep coming and tripping in you know, but I noticed that I could sit there for a week, or maybe one or two people would just walk in. And I had I printed flyers, which I shared with people were not really responding, would show that I wasn't talking to the right people, or I didn't study the market very well to understand whether this is going to sell or not going to sell, you know. So that was the big lesson. For me. Maybe I should have started from home, instead of going to that office, maybe I should have tidied up all the agreements, you know, have a embark purchase order in place so that when the goods come in, I already have people who were who are waiting to pick them up, know that the goods come in, and then I'm now looking for people to pick them up. And it takes a long time, you're also learned is that, you know, when you want to establish a business relationship, especially a b2b kind of business relationship, it takes time doesn't just happen overnight. So I was expecting that that's not I speak to them. Is it nice idea, yes, I'm excited about the idea. But the person I'm selling it to is he or she excited as much as I am, if they are not, nothing will happen. And then even if they are excited, there are processes there procedures that they need to go through before that b2b relationship can be established. Those are some of the things that I learned from that experience. Hmm.

Andrew Stotz 16:45
And, you know, one of the things I was thinking about is, is when when you as a HR professional, see someone coming in applying for a job, and you see on their resume, or they tell you that they had tried to do a startup, but they ended up, you know, it didn't work out the way they plan. You know, for me, I find those people very valuable. Like, you've learned some tough lessons. I'm just wondering, how do you look at people that come to you from an HR perspective when they've been through something similar to what you went through?

Emmanuel Michael 17:18
Yeah, so what I usually will do is to ask them, the lessons that they've learned from that, because for every experience that we go through, we need to be able to pick out the lessons and the lessons should help us to become better in future. So if they're able to share what they've been able to learn from that experience, and how they can avoid it going forward, it means that they've really invested in themselves, it wasn't a waste investment, I wouldn't say that as even though it's worst, it looks like it is waste. You've learned how not to do it. So which means going forward, becoming a better person. So like, if you asked me now, I'm also trying to set up another business. But because of the lessons that I've learned from that experience, I'm setting up this business differently. And I'm certain that this one is going to work very well. Mm hmm.

Andrew Stotz 18:14
You know, if I would just share some of my takeaways from it, I think the probably one of the most common things that I hear from people that are starting up businesses is they didn't test the market. And a lot of people don't realize, you know, they don't, when I was young, and I was studying University, I thought a marketing is easy. It's simple. But what I learned is that marketing is actually really hard. And part of the challenge with marketing is that you are, you're doing two things. You're testing the market, there's the sales aspect, but there's a second thing that you don't think about that much. And that's like, what is your marketing channel? How you gonna get to the customer, you know, once you get to the customer, okay, now, you got to think about how do I convince that customer that this is right for them. And that whole process of testing and iterating I'm always I always admire people who start off their business with this kind of iteration process. Because I think, in my business startups, I've pretty much done like you've done I have my idea. I thought it was a great idea. I went into it with both feet. And next thing, you know, I'm thinking, Oh,

Emmanuel Michael 19:24
I should have started differently.

Andrew Stotz 19:27
I want to think about I want you to just think for a moment because I know that some of my listeners are in a situation where they're caught up in the excitement of starting up a new business, they see a lot of opportunity. And, but they listen to your story and they think oh, I don't want to end up like that. So based upon what you learn from this story and what you continue to learn what one action would you recommend our listeners take to avoid suffering the same fate?

Emmanuel Michael 19:56
Okay, so the one action that I will read comment is, before starting any business at all, you need to do a test. Okay? I'm trying to set up a coaching business now. And what am I doing, I'm testing the market, get a small group, try to offer the service that I intend to offer the larger market tested, tweak it test week, okay, until I'm setting that, okay, this is now ready to go before I launch out and scale it. So you need to test the markets, which was worked in I didn't do, I didn't go to because I knew I wanted to sell to car companies, car dealers should have gone to see test and see, will it work? You know, if it wouldn't work, then I should have done something instead of stocking up and expect that when I go to them, they will pick it up. So testing the market is one idea that I would ask anyone who wants to start small tests, don't do a pilot, you know, don't make so much noise. Don't let people know that that is what you're really doing. We just keep testing the market. And when you are sure that everything is working, like in my coaching business I'm trying to do now, what am I doing? I'm coaching people privately, quietly, one on one, getting feedback, working with them to see whether what I'm working with them is going to work out. So for those that it has worked out for, for some he didn't work out. So I'm also learning the lesson. Okay, these are the things I need to avoid. Okay, for those that it worked out for, I've also looked through to see what did I do, right? And so I've picked these two lessons. That's what I'm going to put together. And eventually when I launch out, it becomes something that is solid, that's going to work for everyone.

Andrew Stotz 21:41
Great advice. And, you know, I have the valuation masterclass. And I've been teaching it basically, I stopped teaching at University for equity valuation about five or seven years ago. And I started putting it online. And it did pretty well online. But I came up with a theory that maybe people want something more intensive. So I thought, how about if we try the bootcamp make it really tough and intensive. And of course, I get these ideas in my head. But that doesn't mean that they're good ideas. They're just good ideas in my head. But I basically said, and this is an important element of it. It's not just iterating the product, it's iterating, the price. And I basically said, I said, I think we charged about 500 US dollars, and I said, I'm going to offer this boot camp, it was in the middle of the pandemic. So we were kind of in lockdown in Thailand, I thought, I know I'm going to be home. And we are allowed to have gatherings up to 20 people, I said, I'm going to offer boot camp for eight people in my home for six weeks. And sure enough, I got eight people, each of them paid. And I took care of them for six weeks. And we developed the curriculum as we were going. And I had already had most of the curriculum done, but we developed the activities, you develop everything. And then we graduated these eight people, and it went really well. And then I went out to say, Okay, I'm going to do it again. But what I found was I just didn't get as much of a response. And it started making me think maybe the markets not there right here in Thailand. And it's kind of meant then the government went to another lockdown that I have to go global. So I decided then to take it online. And now I'm in week five of a six week boot camp. We've gotten 20 Some students as well as one from Nigeria, in fact, in the group, and we've iterated through the material now a second time made it much better. And now we're really ready to launch to the bigger world. And it's time we launched it a little bit higher price, try to get more people in there. And that is important about iterating with price.

Emmanuel Michael 23:52
Yes, yes, that's a good, that's a good idea. That's a good idea.

Andrew Stotz 23:56
So, last question, what is your number one goal for the next 12 months?

Emmanuel Michael 24:03
Ah, my number one goal for the next 12 months like I said, building a coaching business. So my goal is the next 12 months to at least have coached over 1000 either leaders or career transition and skeletons, trainers or job seekers. So my focus is on lead future leaders and job seekers. Okay, right people who want to move from the level they are now to a leadership role. So I hope that next month I would have coached over 1000 professionals. Yeah, that's for next month.

Andrew Stotz 24:48
I want some of my listeners to to to contact you about where is the best way what is the best way for them to reach out I'll have all the links in the show notes where where is the best

Emmanuel Michael 25:01
So LinkedIn is the best place to reach out to me, send me a message and email on email on LinkedIn. So whether you're connected to me or you're not connected to me you can you have the ability to send me an email on LinkedIn. So we can then take the conversation from there.

Andrew Stotz 25:15
Fantastic

Emmanuel Michael 25:18
job seeker or a future leader, looking for ways to be able to leverage whatever potential that you have to land your dream job, or to move into a leadership role. Then the coach the elegant,

Andrew Stotz 25:30
fantastic, so you get there it is, ladies and gentlemen, just go to his LinkedIn. And you'll see I'm looking at your LinkedIn right now it says, Michael, but I'll have the links in the show notes all you have to do ladies and gentlemen come to the show notes, click on the LinkedIn and you will go there well, listeners there you have it another story of loss to keep you winning. My number one goal for the next 12 months is to help you my listener reduce risk and increase return in your life. To do this, I've created our community at my worst investment ever.com And when you join you get that special discount to my valuation masterclass boot camp. As we conclude em, I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Emmanuel Michael 26:27
parting words is keep over life. Don't give up. It might look rough now. But it will look better tomorrow.

Andrew Stotz 26:38
Beautiful. And that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. This is your worst podcast host Andrew Stotz Singh. I'll see you on the upside.