Joel Aita on Business Innovation

#360Mentor is a continuation of the #40DayMentor series. In this episode, Robert Kabushenga (RK) speaks to Joel Aita (JA) on Success Innovation

RK: Joel, it’s my pleasure to welcome you to #360Mentor

JA: Thank you for having me here, Robert.

RK: The most interesting thing that I saw that I would like to start with, Joel; you sold a family house to get money for business. What’s that story?

JA: That was around 2012. We started our company Joada Consult in 2007. By 2009, business was starting to pick up very well. In 2011, I had bigger ambitions. I wanted to build the Joada Headquarters. I picked money and bought land in the middle of Entebbe town in Bugonga and did the groundbreaking and started construction. Before I knew it, all the money we had was over.

RK: What level had you reached?

JA: We had done the ground floor and we were starting on the first floor. The money I had looked at as big had gone. Running the company was becoming a big problem because there were jobs we had got that we had to finance before clients could complain. Then there were some two tenders which needed bid securities around Ugx 200m. But there was no money. But we were quite sure we were going to get these tenders. As a company there were two properties, one was our home and the second one was our incomplete office. Definitely, we could not think of selling the office. The land was very prime, you couldn’t get land that easily.

RK: How big is the land?

JA: Half an acre but in Bugonga.

So the only option was to get money from the home. In the business, my wife and I are shareholders, so she knew the problems.

RK: I want to know how you went to madam and convinced her.

JA: I made sure she was very happy. Then I explained the probes she knew that we needed some money to run the company. She understood because she believed in the vision. She accepted and we sold the house. And then we got some money for the security, running the company and the home. The house was so beautiful. We really loved it.

RK: Where was it?

JA: The place is called Kabale in Entebbe. Immediately we contacted some brokers and within three days, we had a buyer. They paid us Ugx 400m. We paid 200m for the security. 100m for the company and 100m to run the home.

After three days, the guy who bought the house came and told us to leave his house after two days. It was weird looking at a house you knew as yours and seeing it going away. We found a house in Kisubi and moved in. We used part of the money to buy land. Luckily enough, we got the two tenders.

RK: You are really brave. Quietly after the show, I will ask you how you made her happy

JA: Most importantly for me, there was an understanding that this was our business. There was a problem and we needed to find a solution together.

RK: I want to take you back, how did you arrive in Entebbe?

JA: I was born in Arua originally in Yumbe in 1980. I studied at a primary and secondary school in Arua. My first time to come to Kampala was in 1999 when I came to apply for university.

RK: Which school did you study?

JA: I studied in a school called Muni Primary School. My parents were tutors in a teacher’s training college. Then they transferred them to Arua Teachers Training College. We also moved to Arua Demonstration School. After finishing P7, I went to Mvala Secondary School for six years. When I came to Makerere University.

The idea of business came to me quite early. In my primary seven vacation, I ventured out into the sand business. Our home is near a river called Jorudan. It used to have a lot of sand. I called five guys to mine the sand from the river. Then clients would come and pick the sand and after paying me, I would pay the guys. It was a lucrative business for a while until the sand reduced.

Then, my mother got a knitting machine for making sweaters from a German friend. When I reached S4 Vacation, I learnt how to operate the machine. I learnt how to make the sweaters, woollen caps and neck warmer.

I made school uniforms in different colours. During the inter school competitions, I took the sweaters and within like one hour over 100 of them were done. To make one sweater, you need 10 bundles of wool. That time, a bundle of wool was Ugx 500 when I was in S4. To make one sweater, I would need wool for Ugx 5000 and I would sell the sweater at Ugx15,000.  It would make a very quick turnover. In a day, you make like 10 sweaters.

RK: Joel! Joel! Joel! That’s like 150,000?

JA: Hahahaha yes. When it came to going back to school for A level, it became hard. I was already making money, so why did I have to go back to school? We pulled ropes with my father. He’s quite a good disciplinarian. But we came to an understanding. There were two Sudanese refugees who had learnt knitting. The whole A level they were the ones making the sweaters until 2004 when South Sudan became independent and they went back to home. Ever since then to date, the machine is where I packed it at my parents’ home.

RK: So you moved on?

JA: Yes. That is the same year I completed university.  A year before in 2003, I had taken time to ask myself what I really wanted to do. I settled with self-employment. Around the same time, I had to choose between engineering consultancy and construction. Consultancy is more to do with project management, designs and all that. When I graduated in 2004, I decided to work for a construction company for two years. In 2003, Ada and I were still dating. I wanted to show her that I had a future. So we formed a company, Joada, from Joel and Ada.

RK: Is she an engineer as well?

JA: No, she is not. She is into Finance. Currently, she is the director of finance and administration in our company.

RK Your choice was strategic.

JA: Yah. So when I completed it, I got a job with a contractor working on Jinja-Bugiri road. I was there for a year. Then I got a consultancy job with Fitchner, a German company doing a water project in Entebbe. By the end of 2006, I went to my boss and told him I wanted to start my own company.  And that is when I realised it was easier to do consultancy. All I needed was a computer and at the time, I already had good experience in design.

Because we were doing this water project in Entebbe, that is how I ended up staying in Entebbe.

RK: Your life in sports, how do you end up with a football club?

JA: In 2016, we did the designs of Mulago hospital and one of my engineers was from Spain. He told me that his brother is a very big football lawyer in Spain, so he contacted his brother. I then invited him to come and we went to Arua where he was able to see young boys playing. And he saw a lot of talent. So, immediately, he took me through the football business. He gets young boys mostly from West Africa and takes them to Spain and trains them in his academy then sells them to different clubs in Europe and South Africa. So he told me if I was interested we could do some serious football business together.

So in 2016, I developed an interest.  So I formed a club called West Nile Football Club but I really knew nothing to do with football. But the presentation the guy had made remained in my mind. In 2018, I got in touch with him and he told me the best thing I could do was set up a football academy. Then he could come to the academy and get the boys.

So I decided to first set up a stadium with European standards. The idea was that when these boys play here, and are taken to Europe they are not starting from zero.  One of the things that affects the players is that they are not used to the standards of the playing fields. We submitted a proposal to build a stadium in Arua. In 2019, a friend came to me and told me about his club which he had run in the second division for six years. Where he had reached, the club was going to be relegated. So he wanted to give me the club for free.

RK: What!

JA: He told me, if he gave me the club, he knew it was not going to collapse. I went home and thought about it hard. The next day we met. I knew he had money and of all the problems of the club, money was not one. I told him I would only accept to take on the club only if I was paying for it. And secondly, I wanted to take 100% stake. Previously, he was giving me 90%. And lastly, I wanted a clean sheet. I wanted to start recruiting from the beginning. We agreed and in two weeks we had done the transfers. I got a team of people who understand football. For one, I knew nothing. They recruited the team in place.

We sat down and I gave them a target. And after one year, the team would be on its own. I told them after one year we must qualify for the premier league.

RK: When was this?

JA: August last year. I told them if the team did not qualify for the premier league I would fire the entire team. I told the coach to beat all the clubs. Luckily enough the team went unbeaten and qualified for the premier league. That’s how I ended up in football. The team is now settling down and now we are building systems.

Two weeks ago, I took them to Tanzania to study Simba and Younga. We were there for 8 days. I just realised in Uganda, all the clubs are joking.

RK: Why do you say so?

JA: In terms of football business we are really joking. I will give you an example of Simba. Their budget is Usd 5m. I don’t think the biggest club in Uganda goes to Usd 1m. In Uganda, when you pay a player 3 million per month, that could be one of the biggest paid players. Simba’s least paid player earns 11 million per month. The biggest player earns 40 million.

The day we were there, they launched their jersey and in two days, they were able to sell 80,000 jerseys. The most that a club can sell in Uganda in a whole season can be like 3000 jerseys.

RK: Well, we will come back to that. Tell us about the stone soup business model.

JA: That is our business model for infrastructure development. I will start by telling the origin. Sometime during the first lockdown, my CEO for development came to me. We were doing the stadium construction but we were left with only 50 million. This was in the middle of the lockdown. I was in charge of raising revenue and my CEO is in charge of supervising construction. At the time, he needed 1 billion to reach the roof level. I thought of a means of raising money. I had the idea of setting up an estate.

People in Arua were building houses without a proper plan. I wanted to set up a proper estate. We designed an estate with proper plot design, a title and a house design. And no one is supposed to change the design. But we also had to be different from the rest of the land sellers in Arua.

The only way to do business is by selling a story not a product. Came up with a story of stone soup.

RK: Wow, you man! Tell us the story.

JA: The story is about an old man who told his wife that he was travelling a distance. He set off but was unable to get to the place he was going to. He decided to rest at a trading centre and asked people if they could give him a room and he asked them for food. He was very hungry. They told him they too did not have food and were going to sleep very hungry. The old man came out and told the household that he could make stone soup.

So he asked for firewood and different women each brought the piece of wood they had. Then he asked for a saucepan which was filled with water. Different people came with different portions of water they had. They filled the sauce pan. The old man went back to his room and got a small stone and he threw it in the water. So the village was watching and wondering what miracle this man was about to do.

After a few minutes he got a spoon and tasted the water. And he said, this soup is starting to taste nice. It reminds me of the soup which had carrots. So he turned and asked, is there anyone with a carrot? One woman brought a piece and another brought a piece. Small pieces of carrot were collected and added. Then someone asked; can we also have cabbages? They brought and they added. Another brought green pepper. More people started contributing a number of things. And the aroma started coming out.

At the end, it made a small delicious soup the trading centre had never tasted. They went to sleep very excited. As the old man was leaving, the children started clapping for him, “old man, stone soup”

Then the old man turned and asked them, who made the stone soup? They all shouted; “You made the stone soup.”  He told them no, all of us made the stone soup.

When I thought of that story, I wondered what if we used the stone soup theory to own property in a planned estate. I went on my Facebook account and I typed out the story. I asked for 29 people, and I would be the 30th. And we were going to go and own property in a planned estate. Within like 10 minutes, the first group was full. Then the second. Then the third.

RK: No way! That’s impossible.

JA: As of now, in my phone I have 8 whatsapp groups for the estate. Meanwhile, there was still no plot.

RK: What do you mean there was no plot?

JA: We didn’t have land.

RK: So, wait, all this was just the story?

JA: It was still a concept. So I called my CEO and told him to use the 50 million and go buy land. He found it about 8 kilometres out of town and the land was enough for 100 plots of 50*100. The architects came up with designs. There were like four designs and one would choose which area they wanted to be. Proper modern designs that were not complicated.

After two weeks of sharing the design, people were in the whatsapp group chatting endlessly because they were now going to own property in a planned estate.

RK: And all this was during last year’s lockdown?

JA: Yes. Actually, people would be chatting till like 2 am in the eight groups. Eventually the design was ready and we came up with a video of the design. And we were able to agree with everyone that there was no one to change the design. In Arua, people have bought land but have no road access. When we came up with these 50*100 plots which we were charging 10 million each, and you would get a title and a design. One Tuesday evening, we shared the designs in the group with the prices and by Thursday evening, the bank closed our account.

RK: No!

JA: The speed at which money was going was so suspicious. The bank put a halt until we went and explained. By Saturday, 150 people had paid. But remember we had 100 plots. Immediately, we bought more land and expanded. By the end of the month we had sold 250 plots. We had to sell. Now people are getting their titles. That was our first stone soup success.

Construction has now started. There are two options, to build for yourself or to have our team. But we are doing the overall supervision. We want whatever comes out to be according to our plan.

The same applies for the stadium. We are building in Arua. It is also a Stone Soup story.

RK: How did you go about that?

JA: The stadium has businesses all around. The inside wall of the business is the wall of the stadium. The outside wall is the door of the business. We have 150 shops. One 4 star hotel. Thirty apartments. A plaza. We have four banks and one two star hotel and then the stadium.

We had about 10 billion which we have put in this project but then the stadium needed more money. One option was to go to the bank and get the loan. The second option was that if we sold 60% of the businesses, we would be able to raise 100% of the money we need for the construction.

So we advertised and in two months all the 60% was gone and people had paid for it. The smallest shop there is a 4 square meter shop which we were selling at 9 million. It is being taken by a boda boda rider. We calculated for him a breakdown for payment. He would need 3 years. Monthly, he would need 300,000 which comes to 10,000 daily. When we reached the daily payment, the boda boda man realised he could manage that. For the past seven years, he had spent the same amount on alcohol and girls. Now he saves it and brings it to the house. He is our most compliant client. He has not defaulted once.

Some shops are 15 million, others 50 million. Others 100 million. And others 200 million.

It is these small businesses put together that have been able to fund the stadium at 43 billion and the design is per world standards. Which means once we are done with construction, Uganda will be able to hold the world cup or African cup over there.

We are now at 70% completion. As we speak now, all the new cities in Uganda now want the same project. We received a delegation from Gulu. They want one at Pece. We received a delegation from Hoima, Soroti and Entebbe. In Entebbe, they want a sports park which will have volleyball, tennis, basketball and other such sports. That means, these 7 cities could easily have 20 to 40,000 seater stadiums in the next five years without the government borrowing a single coin using stone soup theory.

RK: Joel, you are a man and a half! I guess you are able to do this because the people you are dealing with trust you.

JA: True. We had actually given the proposal for the stadium in Gulu. But then we realised that for this model to be able to work trust is very important. In Arua, the people who bought it came because they knew me. I built the market in Arua and Yumbe hospital. These are guys who knew me personally. In fact when they were coming to pay money, many of them were not coming to pay money in the bank, they would ask for Joel. They would bring me the money and trust me because of my past record.

But now there is a reference point. Trust is a big point. That also gives us a challenge to put the money to good use. We used to have a monthly meeting with all the landlords. We created a whatsapp group and have a weekly update. We also organise site visits.

RK: I want to take you back where we started, tell me you have bought madam a house to replace the old one.

JA: Yes. After close to four years, we started building a house in Garuga. I made sure the title was in her name. When people heard that we had sold off the house, so many people blamed her. People would ask her what if the man sold the house to marry another woman. But she is the one who had the money.

In 2018, we were able to enter our house.  A way better house than the one we had sold. In 2015, we decided to put away money per year about 200M for the office. Until early this year when we were able to complete our offices.

RK: Congratulations on that!

JA: Thank you. Actually around June this year, I invited the vice president of Liberia to come and open the office. That is after ten years.

RK: The other thing about you is that you have a generous heart, of the many things you have done, which has brought you a lot of joy and happiness?

JA: The one which brought me a lot of happiness is the one of Suubi Henry, the Makerere University metallic suitcase student. I did not understand it at first. Then the story broke through to TV and I saw him. His wish had been to become a mechanical engineer but the university had given him an arts course. His plan was to come back for the mechanical engineering degree later. When I heard about that, I thought we could be a solution for this guy. I went on Facebook and requested Makerere to give him a private scholarship to study the mechanical course he wanted. Before I knew it, the thing went viral. Everyone was tagging the vice chancellor of Makerere. The next day, I wrote a letter to the Vice Chancellor. On receiving my letter, the Vice Chancellor called me and said it would be possible to change his course. After two days, he was given the course he wanted. We went and signed a tripartite agreement with the university and that’s how we were able to start. He calls me Daddy. What makes me happy is that Suubi is not my tribe mate or even of the same religion, doing it for someone not my relative gave me a lot of joy. And he is really excelling at school. During holidays, we have a company that deals in machine fabrication. During holidays, he trains with them. Recently, I gave him an assignment to fabricate a machine that can make fuel out of plastics through the pyrolysis process. He is designing that machine right now.

RK: Wow! Joel, the people on these streets usually say, “gavumneti yerimanya kyerikuwa

JA: Thank you. From 2008, we have been training students from different universities to come for industrial training for two months. We normally retain the top two. Once they are done with their studies, we retain them. So far we have trained about 800 students since 2008.

RK: Now I know why when I announced that you were coming, everyone got excited.

Stella Kamakune: There are new clubs which come up and go, what’s the long term plan for your football team?

JA: Thank you for that question. Actually, when you follow the clubs which go down, you realise that they were playing passionate football.

RK: What does that mean?

JA: Passionate football means they were playing football to excite people. But at the end of the day, they were not doing football business. One of the things we are putting in place is to do the football business. We started that by having a stadium. We have business in the stadium. That means that even if we don’t have a sponsor, we shall be able to raise revenue and we shall be able to run this football club. In football there are always ups and downs. You win, or lose or draw. When you are winning, everyone is excited, but when you lose, you will even wonder who your friends are. That happens with everyone. Today it’s #OleOut but if he begins winning, you will see people cheering him on. During that losing time, there will not be sale of jerseys, people will not come for matches and the revenue will go down and the sponsors will run away. In those bad days, if you have another source of revenue then you can be able to weather that bad day. That is one thing we are making sure we do.

We studied clubs in West Nile from the 1970s. How they were going up and going down. There was a club funded by an Indian man. The club did so well and it went to the premier league. The man thought he had become so popular, he stood to be an MP or Mayor and lost badly. He withdrew his support. The club came down. The same is true for other clubs. This year, I am financing the club but next year, they should not expect money from me. They should be making their money now. One of the reasons I took them to Tanzania is to learn how to make the money. Those clubs are self-sustaining.

Asaph Byamugisha: How have you managed to retain top talent?

JA: Actually one of the ways we have been working is that I delegate a lot of work. We get a project manager, and they are in charge of a particular project. That manager has a budget and recruits staff under him and runs the entire project. The freedom to be able to control a project is more than money. That’s how we have been able to work. I have a country manager in Malawi. He controls the project. Sometimes I only go once a year to check on the project. That motivates them a lot.

That does not mean you are going to retain the talent. I usually tell them that if you know you want to form your own company, come to me earlier. I can help them and give them jobs. Sometimes we get requests for designs and our company is very expensive yet I don’t want to send people away. House designs are tedious. So in most cases I take them on and give them to our architects. They meet with the client and that money is theirs. Those small projects give them more money than the salary at the office. They are motivated because of the way you work with them. At our office, sometimes you will not even know who the CEO is.

At our construction sites, we all line up for our posho and beans. I also do not shout at the workers. There is a way they will want to work with you because of the way you treat them. We are not the biggest payers but we have a good work relationship with our teams. So I advise them when they are starting their own businesses.

Amos Wekesa: When I came to Arua, I saw that there was a lot of negative attitude from the leaders, how are you navigating that?

JA: Right from the beginning there were people opposed to these projects. One of them thought I had political intentions, and they decided to oppose the project in a very bad way. We kept going on. We had everything in place. A group of youth decided to come out and fight off the negative energy. So these days, people no longer attack us openly. We look at the majority, we show results and results speak for themselves.

Alex: How have you been able to build such a strong brand? Do you have a book on the way?

JA: Yes. We have tried to make sure everything runs on systems. I don’t run most of the work by myself. I think naturally I am a very sympathetic person and yet in construction sometimes you don’t need sympathy. If I put myself to run a project, it will not go well. I am good at business development and client engagement. As a result I recruit very good people who are very good at these projects. I look for the work and look for someone to do the work. That is why I don’t get stressed. My main job is to run around. We have also been able to identify a number of companies in South Africa, Portugal, Saudi Arabia and in the Netherlands. Whenever we get very big projects, we subcontract them to these big guys. They come up with the designs and concepts and my Ugandan team does the detailing of these designs. That’s why most of our designs are very modern. It’s because we get these international partners to be able to do these designs.

 I have finished writing the book. It is called Entrepreneurs Mind.  They have finished the final edits. It tells our story of what we have been able to do and what we have achieved. In 2008, I sat down and listed the companies we should be operating in by 2025. There was this particular friend who saw all these jobs. At the time we had no running contract but there I was listing the countries I wanted to operate in. We are now in our seventh country and by 2025, we shall already be in all the countries.

RK: Joel, the only thing I can say right now is thank you. Thank you for sharing your story, your advice and insights. Thank you so much Joel.

JA: Thank you for hosting me here. If we can get out of excuses and do one thing at a time and lastly, I will say if you want to start a business, know your numbers. Numbers are very important in business.

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