Gizmos L.L.C. may be based in Chicago, but it is making a business impact all the way in Africa. Noting a need for IT products and services in Africa, Gizmos owner and managing director Greg Marchand opened an African division in Zambia. There, Gizmos – which reportedly earns about $1 million annually – offers business solutions to the sub-Saharan African business community. Among the company’s clients multinational mobile telecom company MTN Group, UNICEF, and the United States Agency for International Development (USAID), which provides U.S. economic and humanitarian assistance worldwide.
“I founded Gizmos between May 2005 and February 2006. I was a management consultant at Deloitte in Washington, D.C. I took a leave of absence and spent eight months conducting research. I arrived in Zambia in February 2005 to start working on a business case for an IT company. I went back to the U.S. in May 2005 to raise capital and cash in my 401-k. While I was there, my mentee from the University of Virginia asked if she could take off a year and help me launch the company,” explains Marchand, who was born in Houston, reared in Chicago and attended Morehouse College. “We landed in Zambia on Sept 1, 2005 with four laptops, a printer, $55,000 from my 401-k, and $45,000 in investor money and a work plan on how to build an IT company in Africa. We worked with two Zambian partners executing the work plan and within five months we had launched an IT company (Feb 6 2006).”
Today, Gizmos provides project management, direct IT support, hardware, software and network administration to African businesses. It also offers Information Technology to business, construction engineering and consulting services. Whatever your business need, Gizmos Zambia can work with you.
With the IT sector in Africa growing fast, Marchand is in the right place. In fact, IBM expects Africa to be a strong growth area for the information technology business over the next five years. There is hyper growth (in Africa),” explains Marchand. “Wireless mobile phone is growing at 33% CAGR per year and Internet is 50-75% growth per year. IBM, Indian and Middle Eastern companies are buying out mobile phone and Internet companies in Africa. IBM and Microsoft are growing rapidly, especially outside of South Africa.”
Although Gizmos is now an international success story, Marchand did face a variety of obstacles when he decided to strike out on his own. “My major business obstacles were access to economic financing, working capital, partners who did not invest similar time, work or money, currency/exchange losses and shipping and taxes,” he says. But determined, Marchard, 34, found solutions, ones that not only apply for doing business in Africa but for any startup. “There are several ways to attack obstacles,” he says. Here are his suggestions:
1. Bring all of your tools if you plan to do business in Africa: your network, capital, skills, time, patience, humanity, courage, technical, literary, etc.
2. Surround yourself with positive, hardworking and passionate people with the same goals.
3. Try to peek around the corner to identify risk in advance.
4. Listen to advice from good sources and use your best judgment to know what advice is actionable.
5. Bring your operating costs as low as possible to decrease the need for working capital.
6. Try to do as much upfront work while you are still getting a salary from a career or job.
7. Build relationships with customers. Find out what they need and deliver.
8. Concentrate on delivery.
9. Be patient, find partners, align your team with the same basic goals and have a clear understanding of your team’s goals before you start
Marchand has found himself with a growing number of African- Americans doing business in Africa. And transatlantic investment opportunities are growing. “Why invest in Africa?” asks Marchand, “Because of higher profits and returns, highest concentration of untapped markets, human and natural resources on the planet, and the opportunity to take advantage of a historic economic boom in Africa. America is missing a lot of opportunity to grab market share and profits in Africa. Partnering with African-based companies is only one of many options. The reason we have been able to build a great team is we provide Americans a unique opportunity to learn how to do business in Africa, and work with Africans and Americans at developing best practices with these markets.”
The time is now, emphasizes Marchand, to look to Africa. “Chinese and Indian investors bring their companies to Africa. Americans can launch companies in Africa and then look for the right partners as they build capacity and local knowledge. Another good option is to get a good job in a country, learn the market and then launch,” he notes.
But before American investors jump into the African market, Marchand has advice from his own experience. “The reason we have been able to build a great team is we provide Americans a unique opportunity to learn how to do business in Africa, and work with Africans and Americans at developing best practices with these markets,” says Marchand. “Start with a core team of Americans willing to work on a business case. Not everybody needs to move 100% of the time to Africa, but a group of Americans working together can get a lot of work done. Start with the American Chamber of Commerce in the country you are targeting and try to find Americans already there doing business. You can partner with Americans who have been in business in your target country and ask for advice.”
You can make contacts at your home base, before venturing to Africa. “While in the USA, access networking groups for Africans like Young African Professionals, or WMBA student groups for Africa or conferences. Another good idea is to bring a partner from the U.S. who is from a country that you have established a relationship with in the U.S. Use the American community in the country you target as a reference for local partners,” offers Marchand. “Use your alumni or business network to find a contact in a country (Deloitte, P&G, Kraft alumni, etc.). Do your on-the-ground research with somebody from your network. Get a business mentor who can introduce you to potential partners. Do not rush into a partnership. I rushed into partnership with the first guys who were interested in doing business. Attend conferences to meet local players. If a partner is not bringing money to the table, keep looking.”
As for Gizmos, Marchand has major plans on building the company. “Growth, growth and more growth,” he announces. “We have great multinational customers; it is about taking our products and services to the entire continent. Our goal is to be the best at what we do and then bring it to as many markets as possible.”