Ep717: Folarin Daniel Adeboye – Business and Friendship Can Never Mix

Andrew Stotz 00:00
Yeah. 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 risks but to win big, you've got to reduce it. Ladies and gentlemen, I'm on a mission to help 1 million people reduce risk in their lives to join me and go to my worst investment ever.com. Fellow risk takers this is your worst podcast host Andrew Stotz, from a Stotz Academy, and I'm here with featured guests. Folarin Daniel Adeboye. A. I'm gonna call you Daniel, Daniel, how are you? Are you ready to join the mission?

Folarin Daniel Adeboye 00:43
Yes, thank you. I'm ready to join. I'm ready to you know, share my story, share my experience. And I want to thank you for giving me the opportunity to, you know, feature of this podcast today.

Andrew Stotz 00:55
Yeah, and you came to this podcast in a unique way in the sense that I saw you post something on LinkedIn. And I said, Hey, maybe you ought to come and tell your story. So that's the background. Let me introduce you to the audience. Daniel was a CEO and co founder at fn que saving savings. In five years of operations F and K savings was able to onboard over 430 5000 users while processing over $4 million in transaction volume. And Evan K stopped operations due to many factors, some of which were simple mistakes by the management team. Daniel is currently consulting and branding whilst still open to new opportunities in emerging markets. He's a tech enthusiast of financial and business consultant and determined to help people make better business decisions. So Daniel, take a minute and tell us about the unique value that you're bringing to this wonderful world.

Folarin Daniel Adeboye 01:48
Thank you, once again, you know, thankful for the opportunity to feature on this podcast. And I think for me, I just as you said, I'm a financial HTCs family tech enthusiast, I anything, finance, anything technology, you know, my head sparks, I want to I don't want to get involved in everything. But I think that most importantly, very, very special about me is execution. You know, I do not. I believe in planning, I believe in strategizing, I believe in, you know, having meetings, but most important for me, which most entrepreneurs or business people miss out is executing their plans, or their strategies and all those things. And that is where I come in. In most cases, that is where I help businesses. And that is one thing that most people love and appreciate about me. I don't just talk I plan and most importantly, I execute.

Andrew Stotz 02:49
Excellent. Yeah. And then the what's the environment like there maybe tell the audience where you are and you know what, what is the financial environment like before we get into your story?

Folarin Daniel Adeboye 03:03
Yeah, I mean, Nigeria or your states to be precise. Basically, Padam Obrador is asides Lagos which we know to be the economic capital of Nigeria. Ebola is one of the fastest growing tech and financial hope. And, you know, we have a youthful population, and our tech population is growing rapidly. Currently, we have a lot of non financially savvy young people. Businesses are just, you know, learning how to save, invest and prepare for their financial future. Not so many. Financial, many of the FinTech platforms. You know, financial technology platforms are situated in Lagos, Nigeria, you know, some of them are beginning to realize the potential of oil states and they are coming down here. Of course, the adoption rate has been low, has not been fast as you know that on average negotiation, but I believe that the battle is coming up, we are coming up to look more like technically we are like five years behind Lagos. But with government intervention or with rapid financial inclusion, I believe that we are ready for the next big thing.

Andrew Stotz 04:23
Exciting. I just want to give a shout out to all of my friends in Nigeria, I have a lot of students and who have taken my valuation masterclass bootcamp, and one of the first one was a guy named Rashid. And he basically was facing some really tough odds when he was trying to take the course but he managed to be the kind of the number one student in that particular group. And so, you know, I've just been really happy to be able to connect with the Nigerian community and young students as well as people working in banks and other places and And you know that the desire for learning and the passion for learning and the dedication is great. So I appreciate that. So Well, now it's time to share your worst investment ever and says no one goes into their worst investment thinking it will be. Tell us a bit about the circumstances leading up to it, and then tell us your story.

Folarin Daniel Adeboye 05:21
Okay, thank you. First I would like to, you know, have so what you said about Nigeria, we were very hard working. And, you know, we are dedicated. I know, there might have been some bad press about Nigeria, but for Nigerians ourselves, we are determined to, you know, change the story, and I'm sure that we are working towards that. You know, for, for me, it's, I remember the conversation on LinkedIn, and the, you know, you have some question, and you sort of brought back the memories for me, and I was like, you know, it goes beyond these things you've listed, there are things that are maybe because of the entrepreneurship prime of Nigeria, it's because the ease of doing business here is not that, you know, remarkable also, you find out that, you know, business owners, entrepreneurs, have to, you know, go the extra mile after do 10x of what's their counterparts in developed countries are doing, you know, and have to take the decisions, you have to take on the spot. Now, in I think, I'm going to start from my university days. I partook in so many activities in school, I was the Auditor General of my faculty. For two years, I did some internship jobs with some financial platforms. So I add basic knowledge of finances. And I saw while in school, I was my pocket money was very, very good. I had a lot of money coming from my parents, you know, I wasn't struggling. And I found out that despite my financial, or my opposite financial knowledge after school, I didn't have enough money saved. I, you know, I probably was a reckless spender in school. And, you know, after school, I wanted to start my business. And I realized that I didn't have enough money to start, as at that time, my parents, you know, felt like they've done enough for me to be hooky through school. Now it's up to you to you know, push yourself. You know, push yourself and, you know, get things done. And I didn't realize that, oh, well, I was, I was in school, I was making a lot of money. What happened? I wasn't, I wasn't, you know, saving enough. I wasn't planning for life after school. And that is a mistake that most university students make in Nigeria. So the basic, the problem we wanted to solve at the beginning of fit savings was to help young students prepare for their financial future. You know, that was our value proposition. That was a problem, we realized, that we identified that we wanted to solve, you know, I, I had somebody that we wanted to work together, you know, like a business partner is a Ghanian is Kwame Ferrari, and that is what led to F and key Ferrari and Kwame, you know, and we joined and II did economics in school. So I knew that I felt like, Oh, you have basic knowledge of economics. And, you know, we could, with my knowledge, or finances, is knowledge of economics, we could, you know, join our heads together and solve this problem. And, you know, it was at that point where startups were coming in, and they were getting funded. And so we felt like, oh, we can actually play in this space. And, and, you know, do something incredible. And that was how it all started. We started very well, we started manually, because we were broke. You know, we had to find ways to get things done. We got some people on board, we shared the dream with them. And, you know, we, within two, three years, we had remarkable growth, right people because it was actually a problem. It wasn't a problem that we guessed. It wasn't a problem that we were just, you know, thinking about it was a problem that we experienced, that we went through ourselves and that we wanted to solve. And you know, so it was easy for us to communicate, to share our story with those students and tell them how it is oh, we are out of school already. We know how it is. You are not out let us plan that will help you to plan for when you will be out of school. And so it was fantastic. And a lot of

Andrew Stotz 09:57
what was the interaction that the students the kids clients or the customers had they were interacting with an app, they were interacting in live events. So how did it work? Yeah.

Folarin Daniel Adeboye 10:06
So at the beginning, like I said, because we were broke, we didn't have money to build an app. So many of the processes were manual, you know, oh, do this, we go from place to please, you know, Nigeria, a lot of things are done manually, sometimes go from to take the cash from them, put it in the bank, on their behalf, give them a sort of receipts, you know, that they were using, but within a year, within a month, we're able to build an app, you know, so all you had to do was, you know, go on the app, create an account for yourself, sign up, create an account, create a plan, it could be a year, it could be an after school plan. You know, we were getting partnership deals from companies who were ready to partner with us, oh, you can warehouse your phones, with your customers phone with us. We could invest it for you and everything. And I think that that was where our problems started. Right. Along the line, we sort of forgot about the basic reason why we started the platform, we wanted to grow so fast, we saw that a lot of startups were growing fast. A lot of them were raising money. And we felt like this is an opportunity for us. We had some conversations. And within a few months, we realized that we were spending so much on hiring, because we needed to build the best app, we needed to, you know, get the best team. And these people don't come cheap. And we were bootstrapping. We're bootstrapping, meaning that. funds that were meant to use to grow the brand, were used to, you know, pay people get some consulting stuff. And that was where the problem started, we now saw ourselves as when I started telling people that we're full fledged financial institution, you know, we because investors might want to talk to us or come to our office, we started spending more on setting up an office space. And, you know, that started affecting us. And I think we exposed ourselves too much. And we had this partner at that time, this investment partner who came with offers that was so amazing. And we felt like because we wanted to grow too fast, we needed to jump into this offer, because this offer would give us so much money. And within two years, we lost a huge percentage of customers funds to this investment partner, because it went down. And that was like the beginning of the problem that we had as a compliment. I you know, I could list them. Some of those things I've talked about wanted to grow too fast. I've talked about the fact that we started exposing ourselves to so many people, we had a we had Partner A saying this, we are partner be saying this, we are partner see saying this, we are partner D saying this, we were confused. And we felt like oh, let's just let's just keep going, let's just keep going. When you begin to grow too fast done your original plan that begins to you know, a crack begins to come. Especially in a financial platform where you are warehousing people's forms. And that was like the beginning of the problem for us. Another very, very important thing that I think was a major problem for horse was, you know, we did not do a lot of Lego frameworks. We were trusted in our abilities. We trusted myself, Oh, you You are young and agile, you can do whatever it is you want to do. Or my partner, you are young and agile also, you can go to this place, go to this place, you can take a walk, you can talk to this person, you're very, very good with sales or marketing. So you do this. So they will left a lot of documentations legal frameworks on done. We felt like oh, I trust you now you can solve this. And we ignored the past that when it comes to actual business, you know, you don't miss pleasure. You don't mix a family with business you go through with basic business principles. You know, and that was another serious problem for us. Now, another thing was, you know, I felt like we were we didn't have enough for sites. Now for sites in the sense that, you know, you can start very well with a Good idea. What are you able to think about? Certain things? Are you able to put yourself in a situation that is five years from now? Or how is it going to be? How are you going to solve this? If this app turns, you know, we're just going, we're just going to wake up on a Monday we go to work, push, get customers on board, we come up, we'll come back on Tuesday, we are back in the office. What can we do to get more customers, we're just focused on customer acquisition, and customer retention, that we forgot about ourselves. And we forgot about what was happening internally, we were just focused on, let's just keep onboarding new customers. And by what I told you, you can see that we did well with customer acquisition. We did well, with customer retention, we did well with the cash flow. But we messed up with basic business principles, which would have allowed us to stay afloat and continue to win the market. And wait,

Andrew Stotz 16:01
how did it go? You mentioned about the investments that was being made, they lost money on the investment. That's okay. So what are they doing with the money? And then yeah, tell us a little bit about that.

Folarin Daniel Adeboye 16:15
Okay, so I think that was about a year after we started operations. And, you know, really one of our of marketing programs. We had some people we had bankers, commercial bankers, who would cope with those whose guys, we know you have money. We can warehouse these forms with you and give you these interest rates. But you know, those interest rates were not enticing to us, we felt like they were too small compared to, you know, and they would not allow us to grow fast. And there was this other company who came in the way into agribusiness importation and exportation financial services on Oh, you we can do this, or we can give you this certain percentage on a quarterly or a per annum basis. And we sat down among ourselves, internally, apple out, this is good. This is what we meet, to help us scale. You know, if you're not getting investors, you're not getting equity investors, and this company is coming with this offer. Let's just go into it. So we did not do proper due diligence. We just talked about the fact that we wanted to grow. And that was the only thing we talked about that led us to partner with that company. And when they went down, we tried to do so many things to you know, get phones back, but it just did not work. Because

Andrew Stotz 17:38
can you remember, can you remember the first phone call or discussion you had when you started to realize that they were losing the money?

Folarin Daniel Adeboye 17:48
i Yes, I remember, it was sometime around December. So, you know, operating a financial platform has taught me that towards the end of the year, we have a lot of customers who want to take their phones out. Right, so many people want to use it for the festive period for Christmas for the new year, you know, families are coming together. So expenses will increase. So a lot of people want to take out their savings or their investments. And also, you know, be proud of that. Anytime I make a call to them. I'm talking about our investment partners. Oh, f and k, welcome. We know you have this amount with us. Do you want to withdraw this? Do you want to do this? You know, it was always so smooth and interesting. And, you know, we it gave us so much confidence that they knew about our portfolio, they knew our name, they knew we're doing and they were even ready to continue to do business with us. So it was around December. And you know, I just made a call. And I remember saying, Oh, I called his name. And I'd said we have some amounts due. And we would like to withdraw this certain amount out so that we could serve our customers this period. And the first question he asked me was oh, is it time? And that sort of alarmed me at call the previous time, or you would be the one telling me what to expect? You will be the one telling me oh, this is what you have. This is what you can collect. This is what you can do. And so why is the conversation changing? Why are you asking me if it is time now. And that was the first sign I heard that, oh, this company, there's a problem something is going on. I remember I called my business partner that day. And I said, Oh, this is what I had. And you know, we just felt like, well, let's give them the benefit of the doubt. It might be that the person wasn't in his right mind and everything. But you know, two or three months after that, the wind down completely.

Andrew Stotz 19:48
And what happened did it just that they made bad investments or did they actually take the money or

Folarin Daniel Adeboye 19:55
so I think the problem, Cliff started with the founder I A as we were taught I, the founder made some wrong investment decision. And you know, at the end of the day, it could not account for these decisions. And you know, he had to move away from Nigeria. He left even his employees again, and nobody could reach him out of the blues. Nobody saw him still today.

Andrew Stotz 20:26
And what were you able to get back any of the money?

Folarin Daniel Adeboye 20:31
Okay, so we tried to do, like I said, we tried to take so many steps. And we could not get even a percentage of those forms. And like I said, earlier, that was like the beginning of our problem, because those were customers' monies, those were, those were in our forms. We needed to find ways to, you know, pay them, because people when it comes to money, people don't want to listen to excuses. So what are you doing to get, I'm going to get these amounts. Now, this is what I expect. And so we found ourselves in a, I would say that the year was a very crazy year for us, because we had to rely on families and friends, to raise some money, we need this money, just give us we need this money just give us in fact, for some people, we had to, for some people who still had money, we thought we had to enter so conversation with them that okay, you know, don't take this money out. If you don't take it out, you're going to increase your interest rates for some people who we got loans from, you know, credit facility, because it was emergency, we got it at higher rates. You know, we got irate because of the shorts, timeframe, we got a very, very high rates, and that sort of piled up the debts that we had. And, you know, you know, businesses run businesses continue to run when they have enough money when the company went down, because the death rate was too high. We've made some wrong investment decisions. We're spending too much on servicing the debt. And also we did not internally we did not fix ourselves, we did not agree on some basic things. And some things were not done. Right.

Andrew Stotz 22:33
And how did you how did it end?

Folarin Daniel Adeboye 22:38
Okay, so, in last year, like I said, they went down last year. Last year, we you know, we have been managing the situation, we started some conversations of getting equity investors who could, you know, get back off the debts and, you know, invest in the company for some for shares. All I remember that we had covered show with get funded Africa, accelerator program, startup bootcamp, we're in conversations with Bobath network. And some other ventures capital as some other funds like that, in 2021, one of them promised to do business with us, if we met some certain criterias, which you also spent money to try and achieve, you know, we could not meet up with the timeframe or you know, they opted out of the conversation. So, we found out that the debt margin continued to expand, they continue to expand, they continue to expand and so last year, it reached a point where, you know, we could not meet up with client's obligations, we could not meet up with them. And so, somebody online Investment Sorry.

Andrew Stotz 25:50
So you were saying, Are you saying that you couldn't meet up with the investments? Yes, we could take it from there.

Folarin Daniel Adeboye 25:57
Yes, we could meet up with, you know, the, the obligation to keep paying the clients, you know, because the detects, margin kept increasing. And I think somewhat last year, you know, we had some regulatory compliance issues. The payments gets, we requested for some documents, which we did not have, and our account was suspended. We have some internal disagreements about how something should go. There were instances of some mismanagement of funds from the investment team. And, you know, we just had to let all the customers know, see, we are in distress, we have to close shop for now, we have to explore other channels to pay you. So what we did was to just stop paying out, we stopped taking in money, we stopped paying out, we just wanted the depths to stay at a particular amount, so that it will be easy to know, that is because you can't keep using depths to service depths. That's, that's Rob, you can't use debt to service debt, you just had to, we just have to stop and let them be in distress, we now have to find other ways to pay you, we can't keep going like this. Going like this means that you know, we are putting ourselves in more trouble. If there were a lot of outcry or a lot of disagreements, there were a lot of dragging, there were a lot of anger for clients, but we just asked to do it because we didn't take that step would be in serious, very, very serious issues today.

Andrew Stotz 27:41
And we're one How did it ended up wrapping up and you know, where is it now? Good.

Folarin Daniel Adeboye 27:47
Okay. So, currently, we are still in the process of, of, you know, selling off remaining assets, we still have some assets landed properties, which needs to be sought. We are trying to do a winding up, winding up means that we can legally sell off this. This assets, the courts would you know, employ the services of deleting getto would then reach out to remaining clients and then form to be getting paid to them.

Andrew Stotz 28:22
To tell us, you know, how would you summarize the lessons you learned from this experience?

Folarin Daniel Adeboye 28:25
Okay, so, for me out, put it down to two or three basic things. Number one, you know, when in business, don't mix pleasure or family with business, stick to basic business principles. Just stick to it, forget about or they don't like me, they're not going to like me, as a business person, they are not meant to like you, you are going to offend a lot of people. So just stick to it. Stick to it. Forget about who this is, my partner is my brother, I have to please Him, you are not there to please anybody you are there to please your customers and your team. That's number one. Number two is don't forget out get started. As long as you feel connected to what led to the idea, the problem that you're going to solve, you know, you're going to keep going, don't forget how it started, and everything. And then number three is understand your business environment. I think those were one of the mistakes that were made. We probably should have visited people who have done similar businesses and failed at it and tried to learn from them. Learn from people try to have Gods Gods very, very important. You can't do business without Gods. So those are like the four very, very important lessons that highlight from my journey.

Andrew Stotz 29:51
And maybe I'll just share a couple of quick things. I think one of the things that I've learned in the financial world is the importance of risk management. Yeah, the second thing is understanding whenever you're taking clients money, that that is so, so serious, very serious. And you know, it's different from, you know, your own money or even in your investors money. When an institution is taking in people's money, it's really based upon trust. And you can see, you can see where the reputations of someone like JP Morgan in America happened and some of the big bankers, because they never, ever let their clients down, down. And that is the key thing, trust is so critical. And then the third thing is, you know, it's just, it's fascinating, because in places like America, as an example, here in Thailand and other places, the regulatory environment is so so tough, that you probably couldn't even have started it, you know, as as, as aggressively as you did, without all the risk measures in place. But I suspect because of the regulatory framework in Nigeria, they're just not, you know, there wasn't that

Folarin Daniel Adeboye 31:07
structure. Structure. Yes. So,

Andrew Stotz 31:12
and I think about to when I get involved with businesses and help people and talk to people, it's almost all about risk management. Yes, exactly. So let's, let's now think about a young person, like you has a lot of energy has ideas that they didn't want to start. So based upon what you learn from this story, and what you continue to learn, what, what one action would you recommend our listeners take to avoid suffering the same fate?

Folarin Daniel Adeboye 31:42
You know, when you talk about one action, it's, it's sort of because there are so many headshots, but I'm gonna I'm going to talk about one which is you know, trust yourself, and nobody else. You know, I, if I had trusted myself, and everything that I knew, and I was ready to believe in myself 100% You know, we'll see how the company today. So, yes, trust yourself. Nobody else?

Andrew Stotz 32:23
Nobody else. Yep. Good advice. What is a resource that you'd recommend for our listeners?

Folarin Daniel Adeboye 32:29
Okay, so yes, I'm going to, I'm going to the resources will be some social media pages. Because that's where I'm going to be sharing entrepreneur stories, tips. You know, things lessons I have learned over time, so yeah, it's bad or startups, bad or startups, bad or startups is on Twitter. It's on LinkedIn is on Instagram, thread, Facebook, you know, so from time to time, we will follow the pages follow the accounts, they're gonna be getting appropriate.