Four Tony Elumelu alumni share tips to win TEF grants

Evolve Africa startup school invited Four Tony Elumelu entrepreneurs to facilitate a session on how to successfully answer the questions of the TEF application. Read the excerpts from the class below.

Session 1 by Mr. Alex

We will be looking at the following sections of the Tony Elumelu application;

  • About Me
  • Leadership Skill & Experience
  • Personal Achievement
  • Elevator Pitch
  • Detailed Description of your business/elevator pitch

Mr. Alex: I will share some valuable tips to you, I have been able to have 70% success rates in my applications and have helped mentored people who got into the TEF program

  • About me

Firstly, you need to understand that your business, or business idea is a story, whatever you are filling in the form should be able to tell that story well. Now as you all know, people can easily tell if your story is good or bad, the Judges are usually serial entrepreneurs who know the ins and outs of business so your ability to tell your story, or make it “click” will determine if they will hand you the cash

One reason, I like talking about my sachet water business, at age fifteen is because it is part of my story, and that is where I started from, so the CEO today was a pure water merchant yesterday. Amazingly, I used this story in the personal achievement session of the application, at the time I was filling my form for the program, I did not have any major achievement in life, but I knew that if I could tell them that I was able to turn N25 into more than N10, 000, they will hand me the dollars and they did.

So your goal while filling your application questions is to tell your story coherently; make it amazing, make sweet. When answering the section that ask, “About me” you have to tell them something amazing about you, let that thing relate with your business, or business idea. A lady who sent her scripts to me, wrote about how she was schools prefect, in secondary school. For crying out loud! That has nothing to do with convincing anybody to give you cash.

  • Leadership Skill & Experience

In the leadership section, ensure that you are only highlighting the skills that are relevant to your business. For instance, you can talk about motivational skills. This means you will be able to motivate your employees.

Next is pitch

Your pitch is the summary of your business model. Your business model is the design of your business on paper, the clearer you can pitch your business in the shortest words or sentence, the better. Your pitch, it is advised to have the following parts;

  • Name
  • Product
  • Target market
  • Unique selling proposition

The way I want you to think about this is that, every word counts, you need to see it like you are doing SEO (Search Engine Optimization. So the more you have the best words that can express your idea well, the better.

Details description is an opportunity for you to write more about your idea, so all the info you wanted to write that you could not, due to space shortage, this will be your opportunity to write that here. As said earlier, your idea is a story, so think of the most amazing ways you can tell your story, and you will be in the TEF program 2019. Thanks

Mr. Nzube): wow. Thanks so much boss for taking out time from your tight schedule to address us. We appreciate.

Participant: Please can you tell us some necessary requirement that one most have in hand

Mr. Alex: Basically, you are to be between the ages of 18-40, I don’t know if they have changed this rule and your business must be in Africa.

Participant: My question…. When filling the about me session…  Will the fact that I am a final year student on a varsity be a limiting factor?

Mr. Alex: Depend, if you have a first class degree, we can be sure that this contributes to your story, because you are distinctive

Participant: By what criteria are the applicants to be judged?

Mr. Alex: All applications will be judged on 5 core criteria, which are:

  1. Feasibility of the business idea.
  2. Market Opportunity: knowledge and understanding of the market, customers and competitors for their idea/business.
  3. Financial Understanding: understanding of the basic financial requirements of running a business, costs and revenues.
  4. Scalability: Demonstrates potential for replication and growth of their product or service to create jobs and wealth.
  5. Leadership Potential and Entrepreneurial Skills: Demonstrate leadership potential, capable of attracting people, customers and resources.

Paricipant: My question goes like this “What if you’re not doing the business currently but want to start, so you don’t know things like

  • Total amount of cash invested
  • Monthly cash expenses etc. and other things you won’t know if you’ve not actually started a business. So how can one answer those parts? Or does it mean that its only people currently involved in a business that can apply for the TEF

Mr. Alex: What I did in my own case, I used projected figure, like knowing this figured from competitor whom are already in business. Some people advised that that section should be vacant but I don’t know how true that is

Participant: My question again is that; Like me I have my ND in water resource management and sanitation 2013 and I’m my final year in funaab studying water resources management (in view) and I have my professional certificate with me (HSE) and the business I want to go into is ‘Pure Water Production’ so can I include my certificate since they are in line with the business I want to do

Mr. Alex: Yes,

Mr. Nzube, Thanks Mr. Alex once again. God bless you.

Session 2 by Mr. Chukwuemeka Oyiana

Chukwuemeka Oyiana is the founder of Jobniche Marketplace, an online marketplace for freelance and professional services that connects entrepreneurs and business owners with the top 5% of freelance graphic designers, digital marketers, financial experts and software developers in Nigeria and Ghana. He is an alumni of The Tony Elumelu Foundation, a member of Cofounders Lab, Los Angeles and a partner at HUB67, Ibadan, Nigeria. He is also a lead partner at Teebah Film Academy, Kigali, Rwanda.

Mr. Nzube: he will be taking us on the following:

  • Wow Us
  • Problem Solved
  • Market Potential
  • Revenue Model
  • Marketing Strategy

Mr. Emeka: Tonight, I will be addressing how to effectively answer the TEF application questions, with reference to the following questions:

Wow Us

What is new, interesting or different about your product or service? (List 3 things)

(100 words)

Problem Solved

What problem does your product or service solve?

(50 words)

Addressable Market

How big is the addressable market for your product or service?

(50 words)

Revenue Model – How do you intend to generate revenue?*

What are the sources of revenue for your business? What are your value offerings? What is the price of these value offerings? And who will be paying for the value?

(50 words)

And Marketing Strategy

Explain how you intend to (or already do) market your products or services to your target market

(50 words)

To begin with, the Tony Elumelu Foundation only selects and funds businesses or business ideas that are new, innovative and different! The aforementioned questions were drawn from this year’s application question

Wow us!

What is new, interesting or different about your product or service? (List 3 things)

(100 words). This is where you capture the attention of TEF during your application, there are so many problems in Africa and how you describe your solution really matters; for example, working age individuals in Africa are starting new businesses

every year but cannot afford to hire and sustain full time professionals to perform their key business activities

Also, Africa has the highest youth unemployment rate in the world, with graduates churned not being able to find jobs, so as an entrepreneur, you decided to create a solution to solve this problem, you decided to create an online marketplace that will connect early-stage entrepreneurs and business owners with top freelance graphic designers

Now to answer the ‘Wow us question’, you should say something like, my online marketplace utilizes artificial intelligence to match businesses with the right freelance talent, which eliminates the need to be in a physical office performing the traditional 9 to 5 job routine, my online marketplace enables freelance professionals to get tasks done remotely from the comfort of their various location anywhere in the world. Now if you look at the two examples I just illustrated, you can see that it is new, innovative and eliminates the need for physical office space before key business tasks get done. So, use that strategy when answering your ‘Wow us question’. Think of new ways to solve everyday problems and adopt it to your answer Next is ‘Problem Solved’

What problem does your product or service solve?

(50 words)

To answer this question, you need to first ask yourself: what problem am I solving? You need to identify what the problem is, who has the problem and you also need to talk to them to find out what frustrates them about their problem. Find out whether they are willing to pay a premium to solving the problem, the answers from your potential customers will give you core insight into the problem you are solving and what features to build in the solution that will solve their problem That said, you also have to describe the existing solutions to the problem you are trying to solve:

  • What do these solutions do?
  • Who are the major organizations providing these solutions, if any?
  • How much do the solutions cost?
  • What do you think these solutions do well?
  • What do they do poorly?
  • What will you do better?
  • What will you do that these solutions do not?

Answering all these questions will help you come up with a very compelling answer to the question:

  • Problem Solved

What problem does your product or service solve?

(50 words)

So for example, you could say; my software solves the challenges businesses face hiring and sustaining full time professionals by using artificial intelligence to match them with the right freelance talent to help them thrive and scale

Now to Market Potential; Addressable Market *

How big is the addressable market for your product or service?

(50 words)

This is one area many entrepreneurs screw up. Many entrepreneurs, when asked this question, are quick to say that their market is big, giving the total population of Nigeria. Your addressable market is one of the main areas of your business plan or pitch deck investors are really looking out for. They want to know the revenue potential or the monetary value of the customer segment that your company could realistically expect to serve and capture

The addressable Market is the same as your Total Addressable Market (TAM). TAM is the revenue potential and monetary value of the customers that your company can realistically expect to serve and capture, this is one wide area that takes a lot of time to explain – Market sizing. For further reading, look up Marketing Sizing online and how to calculate it but for your TEF application, I will give you specifics on how to answer it.

You have to research the total number of people that has the problem you want to solve. That is, their demographics. So if you are looking to serve SMEs in Nigeria, you have to find out the number of SMEs in Nigeria, their monthly or annual average income they generate, how much they will be willing to spend to purchase your solution as well as your median price, your profit margin (the profit you expect to generate with respect to your revenue or sales) and how long it will take them to purchase your solution or product, So you could say; Our market segment consists of small and medium-sized businesses which stand at about 37.1 million (and counting!) across the 36 states of Nigeria. Over 65% of this market generates monthly average revenues of between NGN100, 000 – NGN 5million, but face challenges finding top talent and have the potential of purchasing our services.

To stand out, you should put it like this: Our target markets are working-age business starters, entrepreneurs, owners and managers of SMEs who reside in Nigerian and Ghanaian cities and generate monthly average revenue of $200 – $13,890. Given Africa’s population of 1.2 billion, Nigeria and Ghana (population, 227 million) has over 98 million SMEs that increase annually with a growth rate of 22%. Given the average price of our service categories at $1333, and a profit margin of 70%, our total addressable market is has a revenue potential of $1.56 trillion. But 10% of the total addressable market is our realistic target market which we will capture when 1000 customers purchase our services monthly from our 3rd year of business operation.

When investors see information like this in your application or pitch deck, then they call you ask how they can invest and how much you need

 Next is Revenue Model

  • How do you intend to generate revenue?
  • What are the sources of revenue for your business? What are your value offerings?
  • What
  • Is the price of these value offerings?
  • And who will be paying for the value?

(50 words)

How do you intend to generate revenue?

Investors really love this part. You have to clearly show how your business will make money and when stating, you have to use key words, but keep it simple; For example, my startup generates revenue using the commission-based model of charging 20% from all service transactions. i.e., our revenue model is the subscription model or we use the freemium model or we generate revenue using the recurring revenue model, tiered pricing model etc.

We generate revenue by charging buyer 20%, 30% of the cost of goods sold

What are your value offerings?

Warren Buffet said “price is what you pay, value is what you get” you pay for a service because of the benefit you will derive from it. So here, you are required to state the benefit your solution offers to your purchasing customers i.e., time savings, overhead cost savings, durable plastics etc.

What is the price?

Simply state the price of your solution, but keep it at a median value i.e. our upper bound price is NGN50, our lower bound price is NGN5

Who will be paying for your value?

Here, you describe your stereotypical customer i.e. female business executives in working in Lagos, or early-stage business owners. Be very specific in your description

And lastly, Marketing Strategy

Explain how you intend to (or already do) market your products or services to your target market

(50 words)

Notice that you are limited to specific number of words when answering your application questions, so be very precise, concise and savvy in your responses. Use the right entrepreneurial language like traction, product-market fit, customer base, pivot, scale, bootstrap, key activities, cost drivers, profit margin. Explain how you intend to (or already do) market your products or services to your target market, you have to state your marketing channels, for example; We are building an email list and preparing cold emails we intend sending to prospects after launching our minimum viable product. We will be using SEO to increase our online search rankings and effectively utilize social media ads using creative contents to attract our targeted audience into our landing page.

Also, state how much it cost you to acquire a potential customer i.e., we use Google Adwords to reach our potential customers which costs us $8.35 to acquire one customer at a conversion rate of 56%

You are in the best hands for your application, and trust me after the online training you will emerge successful. Thank you very much everyone, I wish you all the best in your application.

Mr. Nzube: wow… thanks you so much Mr. Emeka… I learnt a lot as well.

The comment session will now be reopened for questions and reactions

Participant: My question is that for any business do the businesses need to be registered first or what and also like me I just want to start the business and I have the ideal

Mr. Chukwuemeka: No, your business doesn’t need to be registered before application. However, if you get selected, you will have to register your business because you cannot receive your seed capital without your company registration documents, so you can go ahead to do your application. But be prepared to get it registered. The earlier for you, the better and ensure that the business/company name you use during your application must be the exact name you should register your business with

Participant: Does your business need to have started running or rendering services before you can apply?

Mr. Chukwuemeka: not necessarily. You can apply as an idea. But it is risky. You have to show that you have started and gained little traction. This will show your level of effort in scaling your business or (business idea) because you are really up against a very fierce competition from those who have even started and have shown traction. This year, 152,000 applicants applied and only 1450 were selected and 2019 is going to more than double this year’s number of application

Participant: But what of we that we never start the business before

Mr. Chukwuemeka: You have to sit down and vision yourself like you are already running the business. You have to go out and talk to existing businesses in your industry to gain insight and then answer your application questions like you have started already. Even if it is one customer that you have, you stand more chance than someone who hasn’t started anything at all. One advice to all prospective TEF 2019 applicants: go sign up on Quora and begin to study topics related to entrepreneurship and your business model/industry

Also, sign up to sites like entrepreneur.com, inc.com, foundr.com, the starta.com and read ‘The Entrepreneurs Guide’ by

Nzube Okonkwo. Anyone can sign up. You can download Quora of Google Play store and install on your smartphone

Session 3 by Mr. Chibuikem Igwe Eme

Mr. Nzube: Tonight we have a guest tutor that will be handling the financial section of the Tony Elumelu application. Some of you who had applied in the past will agree that this section is the most difficult.

Mr. Chibuikem Igwe Eme is an innovative entrepreneur, business developer, financial and investment expert that believes that the average African young person is the driving force for global impact, social and economic change agent and believes that a financial free future is achievable with the right financial knowledge and skills. He Co-founded Beracah Service in 2006 as a teenager, before Co-founding Hedge-wize Consulting 2016.

He has bagged couple of awards, certifications and statements of accomplishments from companies, schools and organizations notably OSHACADEMY, USA; PEACE OPERATION TRAINING INSTITUTE, Switzerland and YALINETWORK, Washington DC, USA. He also has to his credit awards from SAGE Group of Nigeria as Most Impactful student in 2013, Most Improve Staff 2015 @ SKYE BANK PLC (CPC).

He is a recipient of the 1000 African entrepreneurs by Tony Elumelu Entreprenurship Programme 2016. Over the years he has designed and developed accounting systems for startups and existing businesses, an expert in business plan development, developing, and reviewing over 600 business plans and financial plans in three (3) weeks and financial planning both online and offline platforms & businesses. He has consulted for Quific, CEGO LIMITED, HERREN Corporation and Microbold, providing business structuring and growth, strategic planning and investment. He has serve in various leadership capacities for companies, Voluntary Organizations and NGOs among which include Builder’s Choice Foundation, Centre of Defense for Morality, Royal Rangers, Total Care Group among others. He believes in applying the right principles and phenomenon to wealth creation, tools, skills and knowledge in becoming financially free. He currently serves as the Country Chairperson Global Business Roundtable Future Leaders Lagos & Nigeria and a member of the Executive Committee in South Africa. Chibuikem, currently is the Co-founder of KECEPH SOLUTIONS & Account leads at Slatecube.

Mr. Nzube: so he will be taking us on the following:

  • What is the total amount of cash invested to date in this startup?
  • What are your current monthly cash expenses?
  • Lifetime Revenue
  • What is the projected breakeven revenues for the business?
  • Breakeven Volume

Mr. Chibuikem: Hello!

I will deal with financial section and I plead with us to keenly grab it. Anywhere u don’t understand please ask after the lecture

  • Invested cash

What’s d amount of cash invested to date in this start-up?

Here you are ask to provide precise details of how much cash you have spent so far even if you have an idea, for new idea you must have invested in training, etc. Existing business e.g. start-up expenses from inception to date e.g. product development, transportation, internet, employee emolument, infrastructure, etc. You have to state the amount in Nigeria e.g. N540000

  • Monthly expenses ( what are your current monthly cash expenses)

So you have to state how you expend of the total invested cash above or you should include the total of rent, raw materials, salaries, etc. you spent monthly. This amount will added to you total cash invested

  • Life time revenue (How much revenue has your start-up generated since inception?)

If you have not made any sales or revenue, it is expected you provide an estimate or assume. Please note you have to state a revenue that’s not too high irrespective the cost incurred. So if you have an existing business operating, ensure you give a more near revenue value higher than the cost, ensure your cost expense is not overstated in line with the nature of business you are in.

  • Breakeven volume and Price

Please you are required to state with assumption, how many quantity or customers and at what price or quantity, breaking down in months for a year that you will need not be able to go into loss. For example, if I am selling phones, after determining the total cost of sales, if I am able to buy 1000 Samsung phones @ N20,000. It means my total sales will be N20million. So if I sell at N25,000 per phone which amount to 25million, If I remove all the cost established in getting the phone to the market for sale at say, 25million. Then I have breakeven.

Finally, I will suggest that whatever cost you are stating should be real and specific. Thank you.

Mr. Nzube: great. Thanks for this training Sir.

Please guys, take your time to digest this information and ask your questions. The financial section is a crucial part of the application questions. Be sure you are entering appropriate figures

Participant: Thank you Chibuikem Igwe, please for an idea stage are we to make estimate for a total cost to run the business for a year too?

Mr. Chibuikem: TEF only require how much you have spent so far in operating or developing the idea. Start-up cost is need in the business plan. Let get in the cohort first?

Participant: What of those who have not started the business at all or invest in it but only have the idea, how will they go about it?

Mr. Chibuikem: Good!

If you have an idea now and no cost had been incurred…please assume comprehensive cost. But do a cost analysis first of how much it will cost you for a certain period. When I joined the TEF, I joined with an idea too.

Participant: Ok sir going to do that. And those it work out sir?

Mr. Chibuikem: No much cost incurred but I had to assume some reasonable figures that match. Of course you cannot say you have developing the website or under training and you have incurred cost of over 1million. That’s too high and sounds crazy.

Participant: Is it compulsory one most have a Skype account

Mr. Chibuikem: No please. If you have a business social media account u can use

Session 4 by Mr. Nzube

Mr. Nzube: so far we have covered the following sections of the Tony Elumelu application questions:

  • About Me
  • Leadership Skill & Experience
  • Personal Achievement
  • Elevator Pitch
  • Detailed Description of your business/elevator pitch
  • Wow us
  • Problem solved
  • Market Potential
  • Revenue model
  • Marketing strategy
  • What differentiates you?
  • Current milestones
  • Next milestones
  • List your top 3 competitors
  • What is the total amount of cash invested to date in this startup?
  • What are your current monthly cash expenses?
  • Lifetime Revenue
  • What is the projected breakeven revenues for the business?
  • Breakeven Volume

We will be covering the following;  Business Impact

  • What are some of the challenges you face in operating or launching your business?
  • Explain briefly what you hope to achieve from the 9 month entrepreneurship programme?
  • What business skills do you most need to learn about?

Additional Questions;

  • Video to show or explain your product  What’s your view of Africapitalism?
  • Business Impact

Gone are the days when businesses thrive only on profit. Now social investors like TEF wants to see you are solving a problem too. Just imagine you are running a courier service for instance, your business impact could be that you are easing people the stress of sending or receiving their items across the country at an affordable rate, when writing your business impact please highlight your unique selling point, dwell on the unique value you are selling.

  • What are some of the challenges you face in operating or launching your business?

If there is any challenge you are facing in starting your business please here is the section to outline it. Most entrepreneurs will most probably face financial challenges which is ok to highlight but pay attention to other challenges such as Government policies and expertise. While writing this section, tell them how you hope to figure it out as well because that’s the essence of the question. They are not the one to solve your problems, you are the one to solve it.

Telling them of the few problems you may encounter shows them you are self-aware and knowledgeable about your business venture. Let’s say you run an agric farm, having to deal with pests in your farm is a challenge but also point out how you will deal with it.

  • Explain briefly what you hope to achieve from the 9 month entrepreneurship programme

Tip: Winners from this application will be subjected to an intensive online entrepreneurship training so as a potential winner you are expected to highlight what you intend to achieve from the online program. This question in most cases will be used to further improve your experience on the online program and possibly used to understand your expectations from the program.

  • What business skills do you most need to learn about?

Tip: every entrepreneur is expected to be self-aware. You should be able to understand your strength and weaknesses so this question is tailored to help identify your weaknesses as you will be matched with a corresponding mentor during the online program to aid you in further developing yourself and your product. But be smart enough not to make yourself incompetent to run a business. Be precise in pointing out the business skill most needed.

Additional questions

  • Video to show or explain your product:

This is not compulsory but if you really have to do it then you need to upload a video to YouTube and share the link in this section. The video should ideally not be more than 1 minute and really describe your product/service. Please it’s a pitch video so pitch your elevator pitch here. Do not introduce yourself and all that… go straight to the point, highlight the problem you are solving, your solutions and why you think it is much needed

  • Finally, what’s your view of Africapitalism?

Tony Elumelu believes in the idea of Africans developing Africa. The idea of Africapitalism further hinges on the private sector of Africa growing the African economy. It is a call-to-action for businesses to make decisions that will increase economic and social wealth, and promote development in the communities and nations in which they operate. Read it up here and coin your meaning of Africapitalism: http://tonyelumelufoundation.org/africapitalisminstitute/about-us/what-is-africapitalism/

Please if you want your application to be reviewed, send it to hello@evolveafrica.org. Good luck.

Participant: Thank you very much. Please about the reference, how does it help?

Mr. Nzube: Just anybody who knows you. It is usually not used in evaluation

Participant: Thank you very much Sir

I must confess, I really learnt a lot, Not just for TEF But all round. But on the Africapitalism, Is it a summary of the above journal or just your idea?

Mr. Nzube: A summary/idea but you can add on it via the link provided

Participant: Ok sir

Mr. Nzube: But there is no need to reference the link

Participant: Awesome session, thanks a lot. Our applications will be coming in soon for review.

Thanks for reading through, we will be here to answer your questions on the comment session and also remember to testify here if you eventually win the grant.

All the best to you all.

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