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tag:blogger.com,1999:blog-366476412016-09-18T15:49:00.971+01:00AijuswanariteKinda self explanatorysnazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-2381318915039200882016-08-05T16:57:00.002+01:002016-08-05T16:58:03.865+01:00Randomly on QSRA week or so ago I ended up at The Place Lekki for lunch. Fine I braved like an hour of traffic to go get lunch from there, what's it to you. Anyway. When I reached the bank of registers, I saw a flyer for the opening of three brand new stores and I smiled. I've always had a soft spot for The Place since from the time when they opened the first one in GRA circa 07 and were a key part of my weekend diet. I'm pleased that they have become one of the few Quick Service Restaurant (QSR) success stories of the last decade.

Unlike the majority of the QSR players around when The Place started, and with the exception of TFC, it's one of the few that is truly thriving. Unlike the Big Treats and Tantalizers of this world that went for scale quickly, it seems that the race ended up going to those like TFC and the Place who didn't rush and picked their spots.

What is it about QSR in Nigeria that punishes the rush to scale?

Compare this to the Uber/Lyft story as told in this pretty awesome medium article, where the rush to scale was the key differentiating factor. Going big, fast was a key ingredient for success in this instance.

However when you look at the stories in more detail, both the QSR companies and the Ride Sharing companies faced some of the same issues. How do you build traction in each market/location? How fast do you roll out to new markets/locations? How replicable is the traction from previous locations?

Why did similar decisions that led to success in ride sharing lead to disaster in Nigerian QSR?

The conventional wisdom is that the QSR folk overestimated the purchasing power of Nigerians, or had the wrong menu, or had the wrong quality or the wrong locations. The list of things they did wrong is endless. Everybody is an armchair critic. However when you look at the successful ones at least one has identical characteristics to at least one of the not-so-successful ones. Nandos vs KFC. Mama Cass vs. The Place. Tantalizers vs TFC. etc etc.

The argument that I buy more than anything else is operational efficiency. QSR is a low margin business and when you have limited capital as you do in Nigeria your mistakes are more likely to kill you. So if you expand too fast and make too many mistakes, you can't survive your mistakes because you run out of money.

What about you? Why do you think some QSRs fail and others succeed?

snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-46485471138047913072015-12-14T18:50:00.002+01:002015-12-14T18:50:54.111+01:00On Downstream DeregulationI wrote the article below in 2009 for Next I believe. Before Occupy Nigeria, before the mess we currently find ourselves in. I may even have posted it on here before. It's funny how reading it back now every word in there is true. We are still where we were in 2009, the only difference is that we've wasted 6 years. Here it is

A Strategic Take On Downstream Deregulation<o:p></o:p>

That the deregulation of the downstream sector of the oil and gas industry must be approached with extreme caution is clear to most Nigerians. Nothing brings out the picket signs faster than an impending rise in the price of petrol. The mini-scarcity caused by fears of deregulation has probably given impetus to the labor movements who have vowed to stop the deregulation of the petroleum products at all costs. However, most people who have studied the problem say that the only solution to Nigeria's downstream woes is deregulation. <o:p></o:p>

The opponents of deregulation beg to disagree. Their disagreement is not based on disputing the central argument; their opposition is based on a very simple mantra – deregulation will cause the price of petrol to increase which will cause hardship for the masses. This argument cannot fail to tug at the heartstrings of every right thinking Nigerian. However the thrust of the argument seems to be that Nigeria should do whatever it can to provide succor to the masses regardless of cost. It will also not do any good to explain that molues, the cheapest mode of transport, are run on diesel which is a deregulated product. This inconvenient fact can be read as proof that the poor can survive in a Nigeria with a deregulated downstream sector.<o:p></o:p>

While the opponents of deregulation continue their illogical ways, the proponents of deregulation have not done themselves any favors either. There has been no push by the Federal Government to demonstrate that deregulation is the best thing for the nation. In fact the only strong support for the policy is from the people buying space in the dailies to run adverts that advocate for the joys of deregulation. The government line seems to be that since the government can no longer afford the subsidy, the subsidy must end. <o:p></o:p>

While the inability to afford to pay for subsidy is true, and probably the reason for the hard political decision taken by the government, deregulation should not be sold on the basis of government savings. Compare the deregulation story to that of the American health care reform initiative, where a key driver of the reform is that the government cannot afford to finance rising health care costs. However that reform is sold based on the benefits to the populace and not on the benefits to government. <o:p></o:p>

Deregulation benefits our nation in the first instance because subsidy goes away. Look at it this way; the government is projected to spend around $6 billion in 2009 on subsidy. $6 billion translates to N900 billion at current exchange rates or about 41% of the initial N2.2 trillion budget for 2009. I would bet that every Nigerian can find better use for the money than subsidizing petrol. <o:p></o:p>

People point to the fact that deregulation would lead to the end of small petroleum importers in Nigeria. I see this as a good thing. While there is nothing inherently wrong with Musa, Obiora, Seyi, Ebong and Sons being involved in importation, such companies only exist because the subsidy reduces the attractiveness of the Nigerian downstream industry. If you were a major trader in petroleum products you would not want to sell in a market where you have to rely on the government to pay you 40% of your price. The other thing with the small importers is that they are generally one or two events away from disaster. For example unfavorable exchange rate movements or shipping delays can force these businesses into liquidation. <o:p></o:p>

However the main problem with having these guys do a lot of importation is that they cannot afford to invest in infrastructure. Nigeria's downstream infrastructure needs to be upgraded, we need larger berths at the ports for larger ships to dock to deliver product, we need more terminals and tank farms to store the products for distribution, we need pipelines to take the products to the interior from the ports, we need newer trucks (that do not explode) to move the products from the depots to the stations. We are talking about billions of dollars of investment. No credible investor is going to pump that kind of money into the system in an industry where revenue is driven by government subsidy. <o:p></o:p>

Having said all this, the strongest argument in favor is as follows: discussions on the deregulation of telecoms and power started around the same time. Telecoms was successfully deregulated, and power was not. We have more phones than we know what to do with, but we still do not have light.<o:p></o:p>
snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-20971998999229239172015-12-11T13:03:00.000+01:002015-12-11T13:03:44.168+01:00On Marketing a Cinema Movie in Nigeria

Let's play a game. You are a Nollywood filmmaker. You are meeting with your distributor to discuss your marketing budget. You are both trying to decide how much you should spend to market your film. Now keep in mind that your film is not a Tier 1 release – your film is not Half of A Yellow Sun, October 1 or Fifty. It is not selling out a premiere at Eko Hotel. It is not making N20 million the opening weekend.<o:p></o:p>

It is however a good film with marketable stars, and a decent hook. The distributor is proud to work with you and believes in your film. <o:p></o:p>

Are you ready?<o:p></o:p>

Let's go.<o:p></o:p>

The first thing your distributor will tell you is that the minimum you should spend is $500 per cinema location you plan to release in. They tell you this because the foreign studios recommend this amount for their films. <o:p></o:p>

At this point, it should be obvious that if a Hollywood film is spending $500 per cinema, a Nollywood film with less recognition should spend more. But for the sake of argument, let us focus on the minimum. After all you are not made of money, and Lagos State has not given you 10 billboards for free.<o:p></o:p>

You then ask them what they will use the money on. This is what they will tell you:<o:p></o:p>

It costs you about $140 to do in-cinema marketing – banners, flyers, standees, etc in every cinema. If you break it down by city you get something like this:<o:p></o:p>

<o:p></o:p>

In Lagos you have about N600k to play with because there are 8 cinemas, in Port Harcourt and Ibadan around N200k, and the rest about N70k. This is the money that you will use for radio, for brt, for posters, for street crew, for talker screenings, and so on and so forth. <o:p></o:p>

And you are then like okay not bad. N2.1 million abi?

But not so fast. <o:p></o:p>

The distributor tells you that there needs to be social media campaign o – linda, bella and nollywood tweets are not free. We must do Premiere o. Channels, ThisDay and Punch must cover otherwise nothing for you. And we have to make the film available to all the 21 cinemas. <o:p></o:p>

So suddenly your N2.1 million looks like this:<o:p></o:p>

<o:p></o:p>

The first thing you will do is scream. The second thing you will likely do is try and argue that social media and traditional media should not be separate from the N2.1m that everything is inside. Once you do that you will get to a budget of N3.15m.

You breathe easier.<o:p></o:p>

But before you agree, something happens. You are like, wait a minute. How much money do you have to make in cinema to make back your marketing budget? If your distributor is on the level he will tell you something like this:<o:p></o:p>

<o:p></o:p>

Now you are like, no wahala, if I follow the recommended spend the movie needs to make over N12m to recoup your marketing cost. But with my reduced cost I should be able to make ten million. And now you are like, aha that is just N500k per screen nau. No problem.<o:p></o:p>

At this point you are ready to sign, but just before you do, you ask, by the way how many movies have made this money this year.<o:p></o:p>

The distributor starts to mumble. However you listen well and then you find out that –<o:p></o:p>

Only six movies made over 12 million naira in 2015 - 7 if you assume Fifty will join them. <o:p></o:p>

You are scared but you shake it off, and then you ask how many have made 10 million. <o:p></o:p>

When they tell you 10 movies you are like eh? Of the 60 Nigerian films released in 2015 only 10 made over 10 million!<o:p></o:p>

The distributor nods.<o:p></o:p>
Less than 20% of all the films released in the year!

the distributor nods again

GTFO<o:p></o:p>
You then ask the distributor what is the average box off a Nigerian movie makes. They tell you N4 million. You are like, then I should spend N1.3m on marketing maximum abi? And when you remove prints that is N1m in total.<o:p></o:p>

And the distributor is like well, maybe not. Your movie can be the one that breaks out. The audience can embrace it. Look at 30 Days in Atlanta, it opened with just N5m and went to N170m. Anything can happen. You need to give your movie a chance. etc. etc. <o:p></o:p>

So if you were that nollywood producer what would you do?

Would you spend N1m, N3m or N4m?<o:p></o:p>
snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-42874338013722646692015-11-27T12:13:00.000+01:002015-11-27T12:13:22.785+01:00On CompetitionYou can blame the tomato king for this one

You see, the tomato king has been taking out full page ads demanding that CBN maintain its ban on imported tomato paste while sort of kind of banning or not banning tomato paste concentrate. While his stated reason is that we need to save foreign exchange and be patriotic, his main aim is to reduce competition. In the ad he talks about how the ban on products significantly increased the performance of his business and if it is removed, he will go back to the old days and the substandard products will rule the roost. He also happens to mention that if they are going to change the import ban patriotic business men like him should be given preferential treatment.<o:p></o:p>

We know pause for hysterical laughter.

<o:p>
</o:p>

<o:p>Resume </o:p>

<o:p>
</o:p>

I must say I always find it amusing when Nigerian businessmen complain about sub-standard products. They are basically saying that Nigerians are too stupid to buy their superior products, but are being bamboozled into buying that cheap stuff. So if you took that cheap stuff away, then maybe the Nigerian consumer will see the light, and buy their own superior product. In actuality, all they want to do is make money at the consumer's expense with the full support of the government. <o:p></o:p>

While it is a generally accepted belief that competition is beneficial, it is not beneficial to the one losing the competition. Most governments try to balance national pride with maintaining a competitive balance, in Nigeria, we tend to go wholly over to the support national business side of things. Apparently a Made in Nigeria flag is just what we need to become great as a nation – even though the evidence increasingly says otherwise.<o:p></o:p>

All that aside, I wish that the government will focus more on the competitiveness of our industries instead of just the colour of the flag. Our regulators should be saying things like it will suck for a few years but if you can survive and get more efficient, things will be better. <o:p></o:p>

A good example right now is the Premier League. English teams are getting their ass kicked in Europe right now. They do not have the squad to compete in Europe and in the Premier League at the same time. This used to be said only of the Europa league squads, but is now increasingly being said of the Champions League teams. As the Premier League has gotten richer and more competitive and the squads of the also-rans are better it is clear the top teams have struggled to balance the competitive requirements of both competitions (this doesn't excuse Arsenal crapping the bed against Dinamo and Olympiakos though). <o:p></o:p>

However you can clearly see that this state of affairs is not going to last. Yes the fact that Real, Barca and Bayern can sleepwalk in the league gives them an advantage today but it is also clear that given the premier league wall of money the top teams in the premier league will build squads that can compete in both competitions (to some extent this is happening in the Europa league already). <o:p></o:p>

Similarly if you are able as a business to survive the difficult competition years you will be better for it and you would have built a long term sustainable model. However if your focus is on trying to survive on protectionism, one day it will end and then you will die anyway. So the tomato king and others of his ilk should be focused on trying to build a business that can survive in the world as it is, instead of trying to force the government to make the world that they wish.<o:p></o:p>

Survive. Adapt. Thrive. That's the only way.<o:p></o:p>

Laters

<o:p></o:p>
snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-73341992738936564232015-08-03T13:06:00.001+01:002015-08-03T13:06:45.996+01:00On Half of a Yellow Sun - the Movie I follow a number of Hollywood screenwriters on twitter. Different industry, but very educational for a number of reasons. Anyway one of them was talking about a certain class of B-movie.

Does anyone else turn on the premium channels at 9 in the morning & get shocked by all these big name actors in films you've never heard of?
— Zack Stentz (@MuseZack) August 2, 2015
Another screenwriter that read it, posted this reply:

@MuseZack Foreign is always presold on movies like these, and any money they make on domestic is pure profit.

— John Gary (@johngary) August 2, 2015

What he means is that the foreign rights to the movie were presold before the movie was released in the US, and that is the primary method of returns for the investors. This is also the primary method of recoupment for most independent movies like Half of a Yellow Sun - I remember this from their investor deck.

As you know Half of a Yellow Sun did not quite turn out that way - they did not recoup their investment from foreign presales. A lot of ink has been written about why. However there's an interesting dynamic that no one is talking about.

A dynamic exposed by the comment from a Sony executive about Denzel Washington's Equalizer movie from the Sony hack about how foreign box office is racist judging by the relative failure of black movies in international box office receipts.

So this got me thinking - even if Half of A Yellow Sun met every expectation would it still have met the same financial fate judging by the way foreign presales for black movies are very low because of the perception that they don't make money. So in order for a black movie to break out, you have to be like an Oscar contender like 12 Years A Slave.

Call my cynical but if you had cast Daniel Radcliffe (Harry Potter) as a naïve English diplomat named Richard who visits Nigeria on the eve of the civil war, and gets involved with Kainene a bright industrialist, before becoming involved in a desperate love triangle her wild twin sister the beautiful Olanna and her powerful husband the dark and brooding Odenigbo with everyone else playing their same role I have the sneaking suspicion that you wouldn't have had trouble selling the foreign rights.

Of course this story would have been the inversion of Half of a Yellow Sun, but hey it's show business right?

Laters.

snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-65841793345916894802015-07-31T15:44:00.000+01:002015-07-31T15:44:22.399+01:00On El-Rufai in KadunaFollowing the reaction to El-rufai's television broadcast, I decided to do my first 100ish word blog on him.

El-rufai is one of the more divisive characters in Nigerian politics. He's smart, partisan and has trouble guarding his tongue. As a result people who are on his side adore him and those on the opposite side can't stand him.

For example during Occupy Nigeria El-rufai demanded that subsidy be maintained (paradoxically a different position than the one he holds now), and I couldn't stand the mixture of half-truths and rhetoric that he used to state his case. However I must admit that he was one of the more effective mouthpieces for the keep subsidy movement.

However for all his faults, El-rufai is a very capable public administrator, a fact that his media savviness doesn't let you forget. However people understandably find it very difficult to separate El-rufai the public administrator from El-rufai the politician. They tar the former with the brush of the latter.

This has shown in reactions to El-rufai's first two months in office. The APC folk have heralded him as the second coming, and the veritable shoo-in for president if PMB decides not to run in 2019. The PDP folk have dismissed him as a blowhard whose performance is being overstated by a lapdog press corps.

It's impossible to tell which is which in just two months, but finding out will be very interesting.

Laters
snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-22459737721271340702015-02-02T06:50:00.001+01:002015-02-02T06:50:10.149+01:00Two Movies One Script - Week 2Introduction
So nothing extra to ramble about on Week 2, so off we go into the post proper.

Films
This week (as at Feb 1 2015) I saw Nos 51 (Alien) and 64 (Aliens). I decided that for films in series, I'd watch them in the same week. Something about similarities etc. etc.

Once of the most interesting things about Alien for me is that Ripley who eventually becomes the protagonist does not snap into focus until midway through the movie. It shouldn't work but it really does. The Captain, Tom Skerritt's character would be the expected protagonist but I like how the movie plays with expectations that way. I also like the fact that this movie took a standard horror in an enclosed space and high-concept-ed the hell out of it. I read something once that the screenwriters got a breakthrough when they imagined these guys as "truckers in space"that vibe of regular joes in that high tech environment really made the movie. It would not have been as powerful if they were a bunch of "right stuff"astronauts. I've seen the film too many times for it to work as a pure horror for me, so I'm left to admire the intricacy of its construction and how it pulls you in to the world that it has created. I don't know if it was intentional but Ripley was the person who had the weakest relationships with the other crew members. The only person that survived was the "alien" amongst them.

The sequel remains one of my favorite movies ever. I saw this on VHS very soon (for Nigeria) after it came out - sometime in the late eighties or early nineties. I loved the entire military science fiction thing. I loved the banter. I loved the twists and turns. This is one of those movies that unleashes my inner fanboy. It's hard for me to adopt a critical reserve for this movie, so I'm not going to try too much. I will say though, that I love the fact that this movie was primarily about relationships and friendships and interactions, in a way the first one was more about increasing alienation (heh). Having seen both movies, I'd even argue that this is the movie that really established the Ripley that became an icon. So enough gushing.

Script
In keeping with the sci-fi theme of the week I read no 67- ET The Extra Terrestrial.

It's easy to see why ET is on the WGA list. It's a beautiful script about friendship, growing up and acceptance. The movie wears its heart on its sleeve and makes no apologies for that. The plot is simple, a boy finds an alien stranded on earth, they become friends and he helps it get home. The script is a very visual one. Most of the scenes are very short, less than have a page and they are full of motion. This gives the relatively slow paced story a sense of life and movement. However despite the slow pace, the script sets up the central conflict pretty early. So readers are waiting for the right thing, and not for the story to start. The characters in the family were also awesome, well rounded and a true slice of Americana at the time. One of the things about the script is that all the explanations are basically handwaving, - why Eliot and ET become linked, why he dies and comes back, why his mom is angry at them etc etc. But the story rightly guesses that once you build an emotional connection, some of those things don't matter. However I wonder if you will get away with it today, now that we have a greater experience of narrative logic as an audience.

Conclusion
So we had sci-fi horror, sci-fi action, and sci-fi family. They all worked to ground people in the reality of their world by the strength of the characterisation. Alien did it by putting "truckers in space", Aliens did it by making Ripley a lost soul and putting her within the midst of a strong knit family of Marines. Funnily enough ET did the same thing with ET and Eliot's family. It goes back to what Lindsay Doran always says: that relationships are more important than everything else in the movie even the victory. These three movies embody that in different ways and that's part of why they resonate so much. Aiight that's me done. See you next week,

Laters.snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-15780015508571342902015-01-23T13:05:00.001+01:002015-01-23T13:05:49.162+01:00Two Movies One Script - Week 1Random Waffling
So the good thing that happened in the past week is that I found a better name for this: Two Movies One Script. The old name of Read and Watch was indeed horrible and has now been consigned to the dustbin of history.

The other housekeeping point to note is that the movies on the IMDB Top 250 keep changing, and as this is going to take over two years it is pretty clear that some of the movies will move around and will drop off. So I may not actually watch all the movies on the current list. But hey, a little uncertainty never hurt anyone.

So off we go.

Actual Post

Films
So as at January 23 2015 (aka this week) I watched Nos 72 (Oldboy) and 19 (The Matrix)

I hadn't seen Old Boy before, and it's safe to say that it blew me away. Saying Old Boy is an amazing movie is a pretty empty statement, after all it's on the IMDB Top 250, but that's pretty much my first coherent thought when I finished the movie. The second thing that struck me was the fact that the subject matter was treated in a mainstream Korean release. It is almost impossible to fathom this being released as a mainstream US release. Also you can't really discuss the impact of Old boy without talking even lightly about the ending, because the ending gives the entire movie context. But to talk about the ending of that movie is to spoil the movie. All I will say is that the movie pursues grand questions of what it is to be alive, what it means to have revenge, and the embrace of the monster within. Hot Damn.

Like most movie buffs my age, I've seen the Matrix at least ten times. I remember every beat, even though the last of my viewings was 4 years ago when I binged the entire trilogy in one weekend. As expected it held up brilliantly. And with more exposure to writing craft, I really appreciated the clever conceit of the matrix itself being set in 1999 and the real world in a far flung dystopian future making the film almost impervious to dating. The other thing about the Matrix is that it has a lot less action than you would think but the pacing of the action makes it seem like a non-stop thrill ride. In summary, it's an action movie with an amazing concept and with special effects that were germane to the story. It's the kind of groundbreaking idea that becomes increasingly obvious after it has been done. In two words: Still Awesome

Script
I read the 100th movie on the list - Memento

Memento is a script I've read before. It's almost required reading for wanna be screenwriters. This is one of those scripts that is hard to divorce from the movie it spawned, but even as a stand alone work it's brilliant. The way the script constructs and weaves its narrative and slowly reveals the unreliable narrator at its heart. Even though it tells you at the beginning that this is an unreliable narrator, but you don't know exactly how unreliable until close to the end. The script ultimately is a meditation on the nature of reality and how far you go to create your own reality.

Conclusion
In a strange, relatively unplanned, type of kismet, the two movies and one script I read this week were all about the nature of reality and how it can be shaped and warped by experiences and points of reference. In order for the films to resonate all of the three were deliberate, meticulously crafted animals, even the intentionally chaotic Old Boy. There was also a lot to learn from all of them from a craft perspective but I'm currently doing brief impressions as opposed to full on treatises. Who knows maybe these posts will get longer as time goes by. One things for sure though, they'll definitely get better :)

Laters

snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-84817802740912738862015-01-19T15:41:00.000+01:002015-01-19T15:41:26.547+01:00The Next 30 Days

It's official! 30 Days in Atlanta is the highest grossing Nigerian movie in cinema!

According to Ben Bruce; the film has made N132 million. It smashed Ije's record of N59 million to smithereens. If you are going to break a record, that's how you do it.

As an investor in/producer of movies not called 30 Days in Atlanta, I've gotten a number of questions about the film. The first question is "should I see it?" to which I answer "hell yes." The second question is "Will this kind of box office be replicated again?" to which I also answer "hell yes".

In fact I can comfortably predict that baring any unforeseen circumstances a Nigerian movie will break 30 Days in Atlanta's record by the end of 2016 and could even break it by the end of 2015.

To understand why I'm so confident, you need to do a bit of math with me.

I know, I know. But it's not a lot though. Honest.

So bring on the excel:

The table above shows what are seen as the top four highest grossing Nigerian movies of all time. The Return of Jenifa could have/should have been on this list, but I was unable to confirm their returns and have heard conflicting info about the numbers.

Ije's Director mentions her Box Office number all the time, I got HOAYS (Half of a Yellow Sun) and October 1 numbers from some publication I read so those may not be accurate, but for the purpose of this analysis, let us assume they are.

So the table tells you that there are basically two types of big hit Nigerian movies. The blockbuster which makes over N8m per screen, and the mega hit that makes between N3m - N4m per screen. (For those interested: a regular hit makes between N1m to N2m per screen)

By the end of 2015 there are likely to be 30 cinemas in Nigeria and that number is likely to grow to 40 cinemas by the end of 2016. From a box office perspective, that means Nigerian films should be able to open on 40 screens by 2016.

My first contention is that we are going to have more mega hits in Nigeria. I mean we had two in 2014 alone! Which ones are up to the gods, but there will be movies that play like HOAYS and October 1 and those movies will make somewhere in the region of N110m to N160m in 2016.

However if you get a blockbuster like Ije or 30 Days, you could break the record in 2015. A film that grosses N8m per screen would make N240m in the cinema in 2015. However with Ije coming out in 2010, and 30 Days coming out in 2014, it's likely that these blockbusters don't happen everyday.

All that long story is why I'm comfortable saying that by 2016 the 30 Days record will go bye-bye.

One last thing: if I was the Producer of 30 Days, I'll be targeting a November 2016 release for the inevitable sequel. If done well, that film should easily hit the N8m per screen average of the original for a total of N320 million.

When would that figure be broken?

That's a completely different story.

Laterssnazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-67889008312116925782015-01-13T17:12:00.000+01:002015-01-23T11:45:32.283+01:00Read Scripts, Watch Movies, Write PagesThe title of this blog comes from a thing that Scott Meyers of Go into the story blog says all the time. In his view, those three things are the only things you need to do if you want to become a screenwriter. Everything else helps but that is all you really need. I can attest to the truth of that. So to the 2 (or 1) aspiring screenwriter that reads my blog. Take that advice to the grave.

Anyway I decided to do something that I've been meaning to do for a while. Over the course of this year, I'm going to watch the IMDB 250 and read the WGA 101. I've seen and read a lot of these over the years but I figured it'd be fun to go through and see how many I get through in the course of the year.

So I'm going to try a new series, where I try to watch two - three movies a week and read one script and then let you know what my impressions are. It's not about reviews per say, but it is about what I learned from them etc.

Hope you'll stick around. Should be fun.

Laterssnazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-30072891756055636502015-01-09T08:43:00.002+01:002015-01-09T08:43:29.849+01:00Introducing The Department

Introduction
A long time ago in a galaxy far far away

Fine.

So maybe not as tortured an intro.

This is the story of how inkblot ended up making a motion picture called The Department

While we were in post production on Knock Knock, we were trying to figure out what to do next. We had taken a few meetings with potential sponsors and content buyers, and soon realised that sponsor driven content was not the business we wanted to be in at this point in our development. However we had investors, and if you aren't in the sponsor driven content business, you better be in the something else content business.

And the business that we chose to be in was the motion picture business. At the time, there were 13 odd cinemas in Nigeria, but based on building plans there were going to be 20 by the time the film came out. We felt that with a release in 20 cinemas, we had a chance in making the kind of returns that would justify the investment outlay.

But first we needed a story

Development

And thus we went into development. The team began to brainstorm motion picture ideas.

It's actually harder than it sounds to come up with an idea that can sustain a film for 90 minutes that would make a good screenplay that could be shot on a Nigerian movie budget.

At first I bounced around the genre of choice- tried to figure out what is marketable, what is cheap, what is high concept, what is easy to write, etc, etc. Eventually I came down to write what you want

And it so happened, that like many budding filmmakers before me, I had fallen in love with the American New Wave particularly the character driven crime thrillers of the era, like Chinatown, Dog Day Afternoon, All The President's Men, Bullit, Dirty Harry etc, etc.

Those movies were (and are) felt to be a highwater mark of English language cinema.

So being the ever naive/optimistic person that I am I wanted to see if I could make a film that was in the same vein of the classics that I loved. I wanted to see if I could make a Nigerian character based crime thriller.

With that in mind, my brainstorming took on more focus, and I came up with tons of ideas in that time. However the one that kept resonating with me was a simple one:

a thief gets tempted back for one last score.

Simple, generic but I felt it had potential. So I got into a conversation with the idea.

Why is the thief a he, why not a she?

Why can't the thief be married?

Her husband should be opposed to her going back.

Why should she be a thief?

If she's not a thief what is she?

By the time I was done with the treatment it had become:

A woman used to work for a secret criminal department within a respected Nigerian conglomerate is tempted back for one last job and her husband who also used to be a member tried to stop her.

The kernel of the idea was the same, but the form was completely different. I learned later that this kind of investigative process is something that Pixar does very well. [Go read Creativity Inc]

I wrote the script in about 2 months and then sent it out for notes to my trusted reader circle [every writer needs a trusted reader circle]. The script got a lot of love, and I also got very helpful notes.

I then sent it to the blacklist - a US based coverage service. The response was not as loving, but I got some great feedback and then I rewrote and sent it out again to my reader circle. They were like wow, the script is so much better.

After that filip of confidence I resent it to the blacklist. It got better reviews but still not great. However the reviews there were running up against things that were part of the Nigerian centric nature of the script that my reader's circle loved. So I couldn't tell if the low score was because the script was bad or because the script was Nigerian.

In order to break the log jam I wanted a second, more detailed opinion. The blacklist is not there to give the personalised touch. However the Go Into The Story Blog [which all writers should read] had mentioned a coverage service called Script Chix

I reached out to the wonderful Chix - Sandra and Miranda. I told them what I was looking for and we agreed a deal. They read my script, gave me coverage and basically blew my effing mind.

I did a re-write based on their coverage and sent that out to by readers circle. They came back and loved it even more. At this point they were like you have to make this movie.

Next step was to find a producing partner. Knock Knock was a small 5 day shoot, and so the inkblot team could wrangle that. This was going to be a different monster. So I reached out to Uduak Oguamanam of Royal Arts; a writer/producer extraordinaire who I met through twitter [yay social media] who had bags of experience. She read the script and was like sure I'll come on board.

We then attached a director Remi Vaughan Richards who cut her teeth in documentaries and on the NTA/BBC co-production "Wetin Dey." She loved the script, and we had several discussions interrogating the script, that made it even better [by this point it should be obvious that no matter how good a script is it can only get better :)]

Once that was done, we got the financing and greenlit the damn thing.

Pre Production

We greenlit the movie at the end of November and wanted to shoot at the beginning of January, which meant that we had a pretty accelerated pre-production schedule. 6 weeks to lock down the cast, crew, locations, props etc etc. All the fun things that go with production.

On the cast side we knew we needed one of the lead roles to be a mega star and we had a few debates on whether it should be the husband or the wife. Uduak suggested that I watch Forgetting June - a movie Royal Arts/Iroko had just done with Majid Michel. I watched it and knew we had our Nnamdi.

Once we did that we decided that gave us flexibility on the wife. We saw a lot of talented actresses for the role but we were still kinda stuck on the decision as no one was really clicking. While we were struggling on that, I either saw or read something about Osas Ighodaro and I figured "what the hell." I reached out through connections in the biz and got her number. I cold called her, and she happened to be on set. Told her that I wanted to send her a script and asked for her email. For reasons best known to her, she didn't ignore me and gave me her email. She came in for a read and completely nailed the part, at that point we knew we had our Tolu, and the rest as they say is history

One of the things that they tell you as a writer is that you shouldn't really write a character with an actor in mind because odds are that it's impossible to get that actor to play the role. However I wrote Desmond's character with him in mind. So when I told Uduak she's like he's in. I'was like but he hasn't read the script. She's like Desmond is my person, he's in. And he was. And he loved the script. So that was nice.

OC was technically the first person cast. We'd worked together on Knock Knock, and while I didn't write the part for him, I knew he would be perfect for it. So I sent him an email sending him the script, telling him to be available and not to expensive so I could afford him. He loved the script and was kind enough not to bankrupt us and he was in.

To play the chief we wanted a man that would bring certain things to the role and we looked no further than Nollywood legend Prince Jide. Once he was available we were happy to have him, and he liked the script and we were good to go.

We got a very strong and talented supporting cast, put the crew together sped through preproduction and we began shooting on 20th January 2014.

Production
It was a 20 day shoot, and as expected everything that could go wrong did go wrong. We shot only half the scenes on the first day, we had generator issues, missing cast members, constantly rejigged schedules, insanely long days, rewrites on the fly, using police to pick up a key crew member on environmental, almost getting arrested, kicking us out of locations. You know, the regular production stuff. As they say in Shakespeare in love: "How does it work?" "I don't know it's a mystery"

I have come to belief that the heart of that mystery can be found in the dedication and belief of the cast and the crew. The cast and the crew really believed in what we were doing and that sustained us through a very tough shoot. The energy and dedication of the crew and cast was inspiring and humbling.

I remember on the last day of the shoot at 2 in the morning after the generator had caught fire and we had struggling to come up with a solution. I was walking around talking to the crew trying to gauge their morale and pep them up if necessary. When I got to the first camera he told me that he wasn't worried that throughout the shoot we had come through so many disasters that should have derailed the production that he was confident that we would come through.

And he was right.

It was my first rodeo, and I learned a lot from the cast and the crew. The controlled chaos that is production is exhilarating and challenging. I can see why it is almost addictive to the people who thrive on it. There's a reason why Nollywood became the force that it did, and it's down to those band of brothers and sisters that fought through the trenches of production.

I also found a sister for life in Uduak my fellow producer. That's the awesome thing about this business finding people with whom you will walk through fire with [and for]

Conclusion
I could bore you with tales of post production, but that's not as fun for you or for me. Just to say that we wrestled the beast down to the finished product that will be going nationwide on the 30th of January. Once again I am reminded of the truth of this statement "a movie is made three times, first on the page, second in production and lastly in the edit"

Sometimes it's hard to believe that I managed to convince so many people to go on this journey with me to make our Nigerian crime movie - and by the time that we were done it truly became our. As I leave you with the trailer I hope you like it and come out to watch the movie on January 30th and beyond.

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Laterssnazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-56006576484240665572015-01-06T12:06:00.000+01:002015-01-06T12:19:46.486+01:00Your Top Ten 2014Introduction

So one of the things I realised looking through my posts for the last year was that I didn't do a Top Ten 2013. This is especially annoying considering that 2013 was my most prolific blogging year in yonks. I did a grand total of 17 posts in that year. I suppose as I used to do 17 posts a month, that's not really saying a lot, but hey forward ever backward never.

I've decided to start as I mean to go on this year. I'm going to try to blog every other day in 2015, just because I want to get back into the habit of writing stuff that is not twitter or screenplays.

Random aside over. So as before, the Top Ten 2014 list is the most popular posts on my blog based on your page views according to google analytics. As I said the last time I did this, these are not very accurate, but they do give a sense of popularity.

So off we go.

Hold on. Before we go, I must say that for the first time in forever (Random Frozen plug yay!) Hot Girl Syndrome did not make your top ten. You only have yourself to blame for not reading my most popular post in history. Go and think of what you have done.

You fully ashamed?

Good.

Now let's go.

10. Some Ramblings on the Nigerian Film Industry

Nollywood snazz stays popular yo! Which is good. Also good is that my comments about there being a well marketed Nigerian movie that would break Ije's record was prescient. Even better is that I was also right that the N80m - N100m that black movies made should be the new target. However I thought it was going to be Half of a yellow Sun, but it turned out to be 30 Days in Atlanta. Proving again, that indeed nobody knows anything.

9. The Magic Wand Theory
This is first headscratcher on the list. I couldn't figure out why it was on here until I read the damn post. I then realised that it was about politics and because all of you have gone crazy because of 2015 then it made sense. Looking at both the GEJ and GMB campaign, it is still clear that all of y'all are guilty of thinking that the president has a magic wand. Fun times ahead indeed.

8. On Levirate Marriage
The second headscratcher on the list. Why o why are you people interested in my views of Levirate marriage. Anyway this is a very interesting post, because it's normally don't do reaction post blogs anymore. The immediacy of twitter is more fulfilling when you want to go on a rant. For example if twitter didn't exist I probably would have done a post about how female lawyers can't wear trousers to court in Nigeria. Instead I just did a tweetstorm. Instant catharsis yo! A shame though, these reaction pieces were pretty cool.

7. On Female Role Models
This is one of three feminist pieces in the top ten. Yay you enlightened crowd. It's about how female role models should be more evenly distributed amongst the populace. Basically that men should have female role models too. After reading it, my sister made an important point that Nigeria does have female role models that are shared by both sexes - Oby, Ngozi (at the time - see what 2015 has done :p) and Chimamanda. So while we do need men to have more female role modesl, they do exist.

6. That Sexism Thang
This is the second feminist post in the top ten, it also manages to be a headscratcher - talk about a multitasking post. This is a nothing post about sexism as shown by the joke/riddle about the female doctor operating on her son. It also contains a reference to the Harvard implicit test and the bible - which is pretty stuffed for a random post. Clearly I was on top of my game in 2009. I was also a lot funnier. Boo!

5. If You Build It
The first grizzled PE veteran piece that made the list. I liked this piece a lot when I wrote it. I also won't tell you how long I looked for the right picture for the tag (loser). It's a piece that asks a lot of questions that have no answers as shown by the companion piece Picking Fields. But trying to find those answers is one of the reasons I get up in the morning. I'm glad y'all liked it too.

4. Five Thoughts On Chimamanda's Americanah
Talk about female role models. According to blogger, this is a top 5 post of all time on my blog behind the ubiquitous Hot Girl Syndrome (and others). Yes I linked it twice. That's cos I want you to read it. Gosh! [negative cool points to any of you that got the reference]
Anyway enough stream of consciousness. This was one of the many think pieces that was written in the wake of Chimamanda's tour de force novel. I guess it was popular because it captured/shared the conflicted views that many had about the novel - one that will soon be made into a movie starring Lupita and David Oyelowo. I'm looking forward to the outrage once the first trailer hits :)

3. Introducing Knock Knock
Hey, Producer Naz emerges. Funnily enough, I promised to do blog commentary on every episode as they aired. I didn't do them - obviously. I'll try to do them as part of my 2015 post more pledge. Anyway this post was popular, and moved some people to watch the webseries. The webseries didn't set the world alight (now that's how you do understatement) - but the people that liked it really liked it and that reaction as a creator cannot be traded for anything. Anyway go watch the webseries if you haven't yet and go join the very very small cult following.

2. On Being The Change
The highest and third feminist post in the top ten - give yourselves a hand with your progressive selves. It's a piece about feminism and screenwriting and racism how writers can chose what worlds to show and how to depict and represent stories. It's one of the more personal pieces on the blog and it's clear that you all responded to that. And yes Cate is awesome.

1. 5 Things on Healthcare in Nigeria
The post that dethroned Hot Girl Syndrome - fine I won't link it this time. This is a pure finance piece, and we know y'all love your business and finance stuff. It's annoying that the first thing I noticed reading back is a pretty bad shell (if you can't find it that's your business). The second thing I noticed is that it is a pretty good tutorial about how PE breaks down industries we want to invest in. It seems that I gave you people plenty free expo on private equity this year sha. Glad you liked it and I will pretend that you all didn't come around because it had plenty pictures.

Conclusion
There you have it, your top ten 2014. It had a lot of 2014/13 pieces but with enough old ones to warm the cockles of my not so grizzled heart. Thank you very much for coming around here this past year, even though I barely gave you anything to feed off of.

Hope you had a great 2014, and here's to an even greater 2015. Happy New Year y'all.

Laters.

PS. The previous top ten lists: 2012, 2011, 2010, 2009, 2008, 2007 Give the back issues some love yo!

snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-34262213275033705412014-12-04T15:30:00.000+01:002014-12-04T15:30:35.690+01:00The Art of Valuation - Iroko Edition
Early in your career as a private equity analyst, at some point some battle scared veteran will sit you down and offer you these words of wisdom - Valuation is an art not a science.

It will normally be when you are having a discussion about valuation of a target asset. You will either be explaining why you can pay more or less for an asset. You will be arguing based on metrics that you think should normally apply.

Let me demonstrate with two scenarios:

Underpaying:<o:p></o:p>

Your private equity fund is in an auction for a target portfolio company and you the analyst sees the deal sheet. You go storming into the Deal lead's office to wonder why your firm is offering 5x yearly profits for a business when other companies in the space were sold for 10x yearly profit.

The veteran leans back and says: Valuation is an art not a science.<o:p></o:p>

Overpaying:<o:p></o:p>

Same scenario different company, and this time your deal lead wants to pay 10x profits when other companies in the space were sold for 5x yearly profits. When you complain about over paying the veteran leans back and says

Valuation is an art not a science<o:p></o:p>

This seems odd to a lot of people not in the business, because they believe that there should be an objective valuation number that reasonable people can agree on.

However the simple truth is that a company is worth what someone is willing to pay for it. Everything after that is simply a justification for while that valuation makes sense.

Tales abound of deals being hammered out on napkins by deal leads and letting analysts scramble to figure out the justification later.

Let me give you an example: Jason Njoku has said in a blogpost recently that if Iroko gets to 1 million subscribers by 2020, it will be worth a billion dollars.

So say you are an analyst in 2020, and Iroko did get a million subscribers and the deal has gone into auction, what will you tell your firm to bid.

The first thing that you would do is look for comparables. You would like to find other African transactions that would be used to compare to this transaction.

Once you do this, you will definitely not want to pay $1 billion for Iroko.

Here's why.

MTN Nigeria.

In April 2008 MTN Nigeria decided to broaden its Nigerian shareholder base and sold 10% of the company for $1 billion in a private placement known as the Yello NPP. For those of you math geniuses (well who know any math) that valued the equity of the business at $10 billion dollars.

There was about $2 billion in debt at the time, so the company valuation was $12 billion.

Why does MTN Nigeria's private placement matter: Simple because a subscriber is a subscriber is a subscriber.

Doesn't matter what they are subscribing too pretty much from a valuation perspective. They are a person that pays you a set amount of money to use your service. So it makes it a comparable transaction for those people who would be looking to buy Iroko for $1 billion in six years.

So for those of you who have not run for the hills, let's break down the Yello NPP using the December 2007 numbers. They actually sold the damn thing using June 2007, however we have December courtesy of MTN group presentations, so as an analyst you will figure that is more accurate.

So as the analyst you know your deal lead wants to pay $1 billion for the damn thing, so what you will do is make adjustments to the $1 billion valuation using the MTN Nigeria metrics.

Valuation Metrics<o:p></o:p>

Using 2007 numbers, the MTN valuation of $10 billion equity translated to the following multiples. 6x EBITDA and 16x profits after tax. Now MTN Nigeria also had amazing margins – the EBITDA Margin was 63% and the PAT Margins were 22%. Now this means that MTN Nigeria was basically printing money.

Editors note: Since I don't know Iroko's margins, I'm going to be extremely generous to them and say that they have the same margins as MTN and as such, at this stage we are still at $1 billion valuation.

So the analyst will not make any adjustments at this point.

 Subscriber Base<o:p></o:p>

In December of 2007, MTN Nigeria had 16 million subscribers and an equity valuation of $625 million per million subscribers. Assuming the Iroko subscriber is worth as much as an MTN subscriber, the max you will pay for Iroko is $625 million.<o:p></o:p>

So the analyst will adjust the max valuation accordingly.

ARPU<o:p></o:p>

The next question the analyst will ask himself: is an Iroko subscriber really equal to an MTN subscriber. Well in 2007 MTN's ARPU was $12/month. Iroko's ARPU is somewhere in the region of $5/month. This means that an MTN subscriber all things being equal was worth about twice an Iroko subscriber. If you do the actual math, it means that the actual max that you would pay for Iroko would be $260 million.<o:p></o:p>

So the analyst will adjust the max valuation accordingly.

Active Subscriber Base<o:p></o:p>

At this point the analyst wants to go home, however he has to figure out if he has truly equalized subscribers. What he will do is that he will check the activity level of the subscribers. How many subscribers on Iroko use the service every month versus how many subscribers make calls every month. MTN's number will be close to 100%, but Iroko's will probably be in the region of 50% - 60%. So he will then discount again and end up in the region of $156 million<o:p></o:p>

The Deal Meeting

The analyst will then go to the deal lead with his findings. He will tell her that he thinks that they pay no more than $156 million  for Iroko. She will throw something at him and say that she will be bidding $1 billion, that winning the deal is important.

The Aftermath<o:p></o:p>

The poor analyst will then return to his cubicle and figure out how he will justify a valuation of $1 billion. The first thing he will do is decide that he was wrong that Iroko does have 100% actives. And just like that the valuation is back to $260 million.<o:p></o:p>

Market Size<o:p></o:p>

The next thing he will do is look at addressable market.

In 2007, MTN had a 50% market share in a market that was about 32 million subs. Estimate for the size of the market was maybe the population size so 150 million. So the market was expected to grow five times.

So in 2020 let's assume competition has increased and so Iroko's market share drops from the 90% to maybe 66% so the total market size at the time is 1.5 million. He will then decide that the addressable market for Iroko is probably 80 million people but with a 50% discount to be conservative he will target 40 million people. Maintaining a market share of 66%, that would mean that the market growth is about 5x MTN Nigeria's potential market growth. So in that case he will then multiply the $260 million  by 5 and say that the intrinsic valuation of Iroko is $1.3 billion.

However because they are a conservative firm they will bid $1 billion<o:p></o:p>

The analyst will then send this valuation to his deal lead and go home to get drunk.

Conclusion<o:p></o:p>

So what does this mean? I just wrote over a thousand words to show that you could value Iroko somewhere between $150 million to $1 billion.

I know you thought that you would get an answer at the end of this exercise, but you did.

You know that Valuation is an art not a science<o:p></o:p>

Now, now, you know swearing is not polite J

Laters. <o:p></o:p>
snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-16898011872428851772014-10-24T10:15:00.001+01:002014-10-24T10:15:29.219+01:00Picking FieldsThis is the second part of a blog series that started in If You Build It. That post was written two months ago. I assumed this one would be written soon after that one but... reasons.

Anyway this post is here now, and as cliche spouting folk say (just before they get doused with gasoline and set on fire): better late than never.

So off we go.

For some sins that may or may not have been committed in the womb, I have been stuck in the belly of the private equity beast for the better part of a decade.

In that time, I have probably seen 500 opportunities, tried to do the better part of 50 and managed to complete about 5.

Of those 5, 1 is a dog, 2 are stars, 2 are aiight, and 1 is too early to tell. And yes I'm bad at math.

In theory.

To ensure that I remain humble - 2 of the most celebrated private equity deals done in this market in the last decade are deals I tried to do but failed. I even sorta kinda originated one of them.

Nothing says you can pick deals like almost doing deals that made other folk millionaires :-D

The fundamental question you ask yourself in this business - am i crazy

The reason you do that is to ensure the voices are real and not just in your head.

The voices that tell you:

this industry matters, and is cool and sexy but not crazy (sorry Left Eye)

this management team won't use your money to pop champagne or act like they are auditioning for Real World Las Vegas

In the dimly realised future someone will pay you for your business with enough money to prevent you from being spat on by investors

When you first start, the voices are mostly in your head, and you are almost too stupid/arrogant/master of the universesy to know the difference.

You exist in a world of too much greed and too little fear. Figuring out the right balance may or not be worth your while.

I suppose you all (fine two of you) showed up to hear about picking industries, blue oceans, warren buffet quotes, competitive advantage, identifying management teams, bla bla bla. The things that supposedly tell you how to pick fields that build dreams. Well sorry. I a'int got nothing for you.

However if you insist on having lists of things to follow, here are a few things to chew on:

All industries suck - they just do it in different ways

You will be wrong always. What you do about it may or may not matter. Accepting this is one of the hardest things to learn.

Don't invest in or alongside assholes - an investment holding period is too long to not punch them in the face

Not all excuses are equal. Do with that what you will.

This is like a marriage, but with a predestined divorce at the end, and there is almost no such thing as an amicable divorce

There are no right answers. Unfortunately this is a trial and error something. Analytical only gets you so far. Heart/Gut also does the same. You have to live and breathe the something.

You also have to get very lucky once or twice and have it matter.

There you have it. A picking fields something. Hope you enjoyed it, in theory and in fact.

Laters
snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-9383930108402045812014-08-20T15:59:00.001+01:002014-08-21T08:58:29.808+01:00If You Build It

In the wonderful world of private equity, many conversations with entrepreneurs looking for funding goes something like this:

PE Gal: You want how much?

Entrepreneur: X million dollars

PE Gal: And you want to use it to...

Entrepreneur: Expand our existing business. The market is there we need to increase capacity to take advantage.

PE Gal: How do you know the market is there?

Entrepreneur: Because of one or more of the following: [population size], [shortage of product], [local content], [my great market sizing model], [gdp growth]

PE Gal: Do you have offtake for the expansion? Can these numbers be warranted or guaranteed?

Entrepreneur: No.

PE Gal: How can we be sure that people will use your capacity?

Entrepreneur: Because the capacity will be there.

This my friends is the field of dreams phenomenon – aka "If you build it, they will come."

When you are a young private equity investor, these conversations spark your facile mind. You can see the market in your mind. You can see the opportunity very clearly like a shining star. You are awed by the genius of the entrepreneur. You agree with the entrepreneur that the market is indeed desirous of the additional capacity. You want to put your own money into the deal if you could. You truly believe that if you build it they will come.

As you become an old private equity investor, these conversations no longer excite you. The market you used to see in your mind is full of risk. The opportunity has dulled to a sallow candle. You are unmoved by the genius of the entrepreneur. You are not of the opinion that the market is indeed desirous of the additional capacity. You no longer want to put your own money in the deal.

At this point you believe that if you build it, they might come or they might not.

You would think that this means that the old private equity investor will no longer do field of dreams deals. However you will be wrong.

The irony is that practically every deal that significantly outperforms is a field of dreams deal. If you can predict with certainty whether they will come or not in a deal, the deal will be fairly priced, and you're generally not going to make a lot of money doing that [there are exceptions of course].

The thing that separates the successful private equity players from the unsuccessful private equity players is choosing which fields to build.

How do you do that?

Now that's a subject for later.

Peace

snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-2916659581907801632014-07-17T15:49:00.000+01:002014-07-17T15:50:03.170+01:00Some Ramblings on The Nigerian Film Industry
"Nobody knows anything"

That's the opening line from one of the greatest books about Hollywood – Adventures in the Screen Trade – by one of the greatest American screenwriters – William Goldman.

If you could turn a phrase like William Goldman you would be writing in Hollywood, and you wouldn't care about the state of the Nigerian film industry.

In the old days Nigerian filmmakers/producers would have laughed at William Goldman. The Nigerian film industry was a boom market. Everybody knew what would be a hit, and acted accordingly. Fortunes were made as people applied the formula and reaped success.

Yea. Not anymore. In the Nigerian film industry sales are dropping across the board in cinema and in dvd. We have embraced the truth. Nobody knows anything.

Nobody Knows<o:p></o:p>

Here are a few things nobody knows:

Nobody knows why Jenifa, almost alone among the many movies of that type, broke out and anecdotally sold over a million copies.

Nobody knows why that success was never replicated by others and even by Funke Akindele herself.

Nobody knows why Ije remains the highest grossing Nigerian movie ever in the cinema despite being released in 2010.

Nobody knows why the success of Ije was never replicated despite the attempts of both Omotola and Genevieve among others to do so.

But We Know That<o:p></o:p>

So if nobody knows anything, what do we know?

We know that as the number of cinemas in Nigeria are growing and individual cinemas are making more money, grosses for Nigerian movies are falling.

We know that Ije made more money than Jenifa 2, which made more money than Last Flight to Abuja, which made more money than Weekend Getaway.

We know that all these movies were high concept. all these movies had stars. and yet the grosses are falling.

We Think That<o:p></o:p>

Since what we know is all backward looking, we think we know why this state of affairs exists.

The Hollywood Blockbuster Effect: We think that as Hollywood has embraced the blockbuster model over the past few years, Nigerian movies pale in comparison and are not seen as value for money. The theory is that if I can pay N500 – N1000 for Spiderman/Batman/Transformers, why should I pay the same amount for the latest Nigerian movie?

While there is some credence to this theory, especially in the head to head space – Render to Caesar got crushed by Captain America 2 for example- the success of the black American movies in Nigeria shows that there is space for non-blockbuster fare. From Best Man Holiday to About Last Night to Think like a man 1 & 2: None of those are traditional blockbusters. None are more effects driven than the Nollywood movies. All of them attract grosses in Nigeria far in excess of Nollywood movies.

While Blockbusters will continue to drive revenues – Avengers remains the top grossing movie in Nigerian history – Nollywood movies could occupy the same space on the totem pole as black movies.

No marketing: We think that Nigerian movies do not have marketing heft behind them. Foreign Movies generally have more marketing. People are more aware about the existence of Hollywood titles, and even if there is no local advertising, they heard about the movies from international media. Movies depend on saturation, and when there is no saturation, films struggle. Well Ije did 60 million with no real marketing on 6 screens. Return of Jenifa did 40ish on 10 with no real marketing. Average grosses today have dropped to half that.

I think Half of a Yellow Sun could provide some clarity here. The film comes out on August 1. It has Hollywood stars, and is based on one of the most beloved books of the last decade. The Distributor has also put quite a bit of marketing muscle behind it. So if Half of a Yellow Sun breaks Ije's box office record, then we can believe that marketing had an effect and that this thought is a pretty good thought.

Movie Quality is Dropping: We think that Nigerians have been betrayed by bad movies at cinema so they no longer want to spend their hard earned money on cinema films. My issue with that is how can you tell? Was Ije significantly better than Tango with Me? Was the Return of Jenifa better than Weekend Getaway? Was Figurine better than Phone Swap? Quality is subjective and when people start using it as the answer, it's generally because they don't know.

Too Many Movies Coming Out: We think that grosses are dropping because too many Nigerian movies are coming out. This is causing the numbers to drop. Ije became the highest grossing Nigerian film in Nigeria with on 6 screens in Nigeria with a long run. So it is true that movies are unlikely to have the same number of legs that Ije did, and you can see that the average run for a Nigerian movie is between 1 – 2 months. However the opening weekend grosses are dropping. There are currently 18 cinemas in Nigeria. If the issue was too many movies, you should have a quick kill type of structure that happens with summer releases in the US. Where movies start off high, and peter out fast when other movies open. However most movies open low, which shows that it is not the quantity of movies that is the issue.

No Data: We think that there is no centralized box office data, so people cannot use the box office data to develop movies that appeal to the market. If the producers allowed the cinemas to publish and collate the information, everybody would be better off. All of this may be true, but since the return of cinemas in 2005, I don't think up to 100 movies have been released. 100 movies is not a statistically significant sample. I mean Hollywood big data guys crunch numbers on thousands of movies and they are still wrong, so what could 100 movies tell you that you think would make a difference. Granted a little data is better than no data, but let's not pretend that it will matter very much.

Conclusion<o:p></o:p>

I could go on thinking but I think five thoughts is more than enough. So eager producers and filmmakers, let me leave you with the following advice:

§ Get as much data on previous movies

§ Write/buy the best script you can

§ Hire the best, most famous actors you can

§ Spend the most money you can

§ Make the best movie you can

§ Market the hell out of the movie

§ Avoid the Hollywood blockbusters upon release

Do all of that, and hope for the best, but remember that one simple rule:

No one knows anything.

Laters
snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-87584422055271491922014-07-02T09:28:00.001+01:002014-07-02T09:28:25.016+01:00Why Representations MatterAs everybody and their mother will tell you this world cup has been amazing. The games, the goals, the atmosphere. The DSTV coverage has generally been excellent as well. However my enjoyment of the world cup was for a brief moment marred yesterday by one of the most casually sexist ads that I have ever had the misfortune of seeing. The ad was by Coke (I think) and was about types of fans.

The ad was basically a visual triptych where there were three situations served as three panels that elaborated on the theme of what it means to be a fan.

The first panel was a woman cheering happy that her team won. A man who is off-screen smugly tells her that it is only half time. She looks embarrassed and the scene changes.

The second panel was a group of women cheering, whooping and hollering at the screen. The camera pans to the screen they are watching and shows a football player not doing anything but flexing his muscles.

The third panel was a group of three menials - all men, probably cooks - who were risking their livelihood to watch the game because they were such fans.

This ad could be used as a learning aide to help people understand the definition of the "male gaze."

This ad would have been powerful if the people in the third panel were also women. Then it would have been a smart, slightly subversive, commentary on different types of female football fans. But by making the last panel male, the ad is implying a far more damning critique of female fans.

That they are either clueless fans who don't know anything about the game, who need a man to explain things to them. Or that they are superficial fans who only follow the game because the men are fine. According to the ad, the only real fans are men.

Of course the creators of the ads will say that they had no intention to belittle, it was just funny, etc. And there will be a lot of people, who because they know women who fit in those boxes, say that there is nothing wrong with the ads.

However what about the women who don't fit into that category? The charitable interpretation is that the ad is not for them. The other interpretation is that they are either one of the two type of female fans and they just don't know it yet.

And that's why media representation matters. Not because the negative stereotypes don't exist, but because when all you show are negative stereotypes it tends to create the impression that the negative stereotypes are all there are.

There's this view that the positive representations are propaganda, that people are just being "true" to themselves when they depict these negative stereotypes. When I hear that, that tells me that you aren't trying hard enough, if the only stereotypes you can depict are the negative ones.

DSTV themselves struck a massive blow to the stereotype of the female football fan when they hired Chisom as one of the hosts of their Nigerian PL show a few years ago. It was hard to maintain that dismissive attitude to female fans when the host of the show was frequently more knowledgeable than the guests themselves. It's a shame that the studio fire put an end to the local PL coverage.

I don't want to go deep into sociological reasons why these kinds of representations are harmful etc, my own is simply that if you are a creative that has the opportunity to do shit, don't do shit like this. As Cate said - Be the change.

Laters.snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-39814877259225218302014-04-14T15:36:00.000+01:002014-04-14T15:36:05.526+01:00Do BetterAs you all know there was a bomb blast in the early hours of the morning at the Nyanya Bus Park in Abuja about 15 minutes from the city centre. At the time of writing over 70 people have been killed, with scores injured. The President, the Service Chiefs, the NSA and many other people tasked with the nation's security have visited the site and spoken about the tragedy. As with previous attacks it is believed to be the work of the Boko Haram sect. It goes without saying at this point, but the fig leaf of an Islamic Jihad previously used by the sect to justify their actions has been ripped away and has revealed a group of mostly young men caught up in a nihilistic death cult who are waging war on the poor and weak amongst us.

There have been a lot of words written about Boko Haram and its origins and its ramifications and many suggestions about the way forward. I do not know the answer, and I am not sure that many who are proffering solutions do either. What is clear is that the situation is complex and not fit for simple solutions. "If only we did this" or "If only we did that," "this person is to blame,"

In the last 4 years in which the Boko Haram menace became a daily part of our lives, there has been a lot of money expended on our security forces to combat this menace. Budgit could supply the exact figure, but I'm sure over $1bn has been spent on the war against Boko Haram. I don't think anyone would argue that the funds provided have been optimised. That the war against Boko Haram has been fought in a manner that is commensurate with the resources that were provided. This does not mean that our brave troops do not care, or that they are members of, or sympathisers with, the sect. But that the execution deficiency that pervades a lot of our government actions translated to the fight against Boko Haram. As the slightly modified saying goes, do not ascribe to evil what can be explained by mediocrity.

Despite the manner in which the fight was generally conducted, our armed forces know the business of war and given a clear target they delivered. Just like in the latter days of the pre-amnesty Niger Delta militancy, the armed forces won key battles and the Nation was lulled into a sense of security. The smashing of the terrorist camps in Borno. The fleeing of the disillusioned remainder across the border. The establishment of a "theatre of engagement" and the doctrine of containment. The declaration of "Mission Accomplished" and all that was left was the mopping up.

Alas it was not to be. Containment became complacency. The inability to fight successfully against a counter-insurgency exposed.The damaging illusion that the "containment of Boko Haram" to the North East was successful that was cracked by the SSS HQ attack has been shattered by today's events. I agree with those that point out that today's attack mirrors what the residents of Borno have lived with for 4 years, and that it is a tragedy that none of those blasts have gotten this kind of attention. However the pretense of the war being far is over, and now we start again.

We start to worry about our lives and about what it means for us to live in a nation where security cannot be taken for granted. Where boy-men go around treating death as a game. Where the men who are tasked to protect us seem helpless in the face of so much evil. As someone once said, the defenders have to be perfect, the terrorists only have to succeed once.

I don't know what the future will bring. I don't know if there will be many more Nyanya's or if the tragedy will eventually come to Lagos as most fear. I do know that we need to do better. 70 people have died today, and it will likely be more by tomorrow. Scores have been injured. Lives and livelihoods have been ruined. We need to do better.

The solution is complex. There is no silver bullet. It will be a long slog. All these things are true. But we need to do better.

This is not acceptable. This is not tolerable. This must be answered. We must do better.

snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-47745344242561310022014-04-08T17:05:00.001+01:002014-04-08T17:05:28.393+01:00On Businesses, Long Term Thinking and Low Trust Societies

I first heard about Give and Take from Eghosa of EchoVC about a year ago now. We were talking about the kind of culture that is needed for the tech community in Nigeria to take off and he suggested that I read it. I read the book. Took a gander at the website, and read the article that came out before the book.

Since I did, I've been recommending it to everybody I know in the extremely rare event when they ask me to recommend a business book for them to read. I recommend that everybody read it. It's a book that is particularly important in Nigeria.

Anyone who has done business in Nigeria will tell you that for the most part the business culture in Nigeria is a low-trust culture where people generally expect other people to take advantage of each other. Femke Van Zeijl in one of her Femke becomes Funke articles goes into a pretty insightful discussion of the origins of this. If you haven't read it, check it out here.

So back to low-trust culture. The reason why having a low-trust culture is a problem in Nigerian businesses is that by definition businesses are a long term play. You cannot build a long term business where there is low-trust. When there is low trust you take money off the table as soon as you can, which stops the businesses from investing in the future, and then obviously from growing. This is why a lot of businesses in Nigeria stay small.

I can't tell you how many conversations I've had with people about scaling businesses and working with other parties, only to be told that people would actually rather have a bigger piece of a smaller pie. And from their point of view it is logical. Since they believe that the other party will take advantage of them, they will not get the bigger pie, so it made sense to be happy with the smaller pie. I'm sure a lot of you are nodding and smiling in agreement.

Since that was not the way I looked at it, it was continually baffling to me until I read give and take. Give and take is more about working together but its main thesis is also about short term and long term thinking. Short term people are takers, and long term people are givers. Similarly short term people buy into the low trust culture, long term people seek to transcend it.

In the short run it is better to be a full participant in the low-trust society, your business suffers less setbacks and it will not be "taken advantage off" by people who are fueling the low trust society. However in the long run the businesses that scale are those that transcend the low-trust society, those that are able to make the long term connections and sacrifices that are necessary to make businesses grow.

In my experience, there are three types of businesses that are able to grow and scale in Nigeria:

Patronage Businesses: These are businesses that rely on political and familial connections to gain profitable contracts. These businesses are able to scale to the limit of their political connections. They are happy to invest in the future to get bigger and bigger contracts because the ability to gain opportunities are primarily dependent o their political connections. Obviously, these businesses tend to be one-man businesses with highly visible founders who are almost synonymous with the business. If they are unable to maintain their connections they tend to shrink back down. I'd even go as far as to argue that some of them, like Dangote, Sahara, Oando are able to transcend their beginnings and establish themselves as businesses that are not dependent on political patronage.

Family Businesses: These are businesses that are able to scale because they have a number of capable family members that trust each other. This enables them to invest in the future which allows them to build long term businesses that take advantage of the opportunities of scale. A subset of this kind of business is when close friends do it. A lot of the businesses that achieve scale in Nigeria are generally a subset of the family business. I would also say that the line between family businesses that scale and patronage businesses that scale is pretty blurred.

Baby Institutions: These are businesses that are set up to be institutions. They tend to have professional management and the owners expect to plough the profits back into growth. A few textbook examples of this is Arthur Andersen's arrival in Nigeria and the establishment of Interswitch. Technically another example is Rocket's Jumia but the jury is still out on that one.

There are a lot of opportunities lost because people are unable to trust each other for longer than five seconds. Will yours be one of them? Think about it, and while you're at it, go read Give and Take.

Laters,

snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-36150691456061302112014-04-04T18:11:00.002+01:002014-04-04T18:11:59.676+01:00Game Changers - DSTV BoxOffice EditionOn April First, Colin Udoh a Supersport presenter tweeted this:

That picture is a screen capture of the BoxOffice page. DSTV has rolled out a Video on Demand Platform called BoxOffice in Nigeria where you can rent new movies via your explora HD box. This is a very popular service in South Africa where there are over 400,000 rentals a month on the service according to Naspers (DSTV Parent company).

It will take a while to catch on in Nigeria, but as the Explora adoption continues to rise over the next few years this could become an increasingly important part of the producer's toolbox in Nigeria and in the rest of Africa as DSTV rolls out Explora BoxOffice across the continent. Assuming of course that they take Nigerian movies. And why wouldn't they? Africa Magic is one of the most popular stations on the DSTV Platform.

So back to BoxOffice: Right now DSTV charges N400 to rent a movie for 48hours. If DSTV follows the patterns of VOD players worldwide the Producer/Rights holder will get anywhere from 1/3rd to 50% of that N400. That figure N120 - N200 is about what a Producer gets for DVD sales in the non-oil market. I don't know the economics of BoxOffice at the moment. However if it is similar then it create a bridge between the cinema release and the sale of rights to Africa Magic and Iroko and create a new stream of revenue for the producer. And (pie in the sky time) if/when the BoxOfice platform goes Africa-wide a producer could get 20k - 40k rentals of her movie, and at that point, the returns start to rival dvd sales.

According to Jason Njoku of Iroko my friend Uduak's Desperate Housegirls was the most watched video (I think in 2013). She did not share in that success past the initial license fee that Iroko paid. That's fine, that's the way the streaming model works. And that's the way it should work, long tail and what not. However the development of a VOD model will allow a complement to the streaming platforms as they allow price discrimination. The people who have to get it now will do VOD, the people who wanna wait will. If there are enough "gotta get it now" folks then we will have a market.

The Game Changer though isn't the rollout of BoxOffice on Explora, that's just a nice little pick me up. The Game changer is the inevitable day when StarTimes and GoTV are able to host BoxOffice or a similar VOD platform on those cheap boxes. Can you imagine what happens when Nigerian movies can be rented via the 1.5 million combined boxes of StarTimes and BoxOffice in Nigeria alone? Yea I thought so.

Laters

snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-27768580681661982302014-04-02T17:53:00.002+01:002014-04-02T17:54:07.119+01:00Wanna Be an Infant Industry ForeverIf you were unfortunate enough to pay attention to development economics in the late nineties/early noughties you would have heard a lot about import substitution industralisation (ISI) vs export oriented industralisation (EOI) the two great competing theories about the path to economic growth.

In those heady days you had to pick a side. You couldn't be a little bit ISI and a little bit EOI. None of that "it depends" economics crap. However with the East Asian economic miracle and the rise of China EOI was eventually seen to be triumphant. Nothing wins an argument like 7% - 10% annual GDP growth.

ISI in theory is a very attractive policy... in theory. Use your local market to develop an industry, create jobs create wealth - what's wrong with that. People is what. When you do ISI, you will create some successess but mostly you will create a bunch of rent seeking crony capitalists. Ladies and Gentlemen that specialise in creating low quality high cost companies who needed government support to survive for ever. Now every policy has its positives and negatives but since EOI was so dominant as a policy the evils of ISI became too much to ignore and the policy and it was pretty much discarded.

A policy like ISI with its theoretical attractions can never die. C'est ne possible pas (random horrible french). So it has been reborn as an even earlier theory - the Infant Industry protectionism theory. This is the one everyone has heard. We need to give our local companies time to breathe and so we will ban goods/raise tariffs/give tax breaks/etc to give our companies. This is not the evil ISI you have heard about (nudge nudge wink wink) this is the good kind where we grow industries until they can stand on their own feet and release them into the wider world to compete. The only problem is that these industries seem to be infants forever.

Take Nigeria which for the last 10 years has been the poster child for this new brand of infant industry-ism. At some point in the past decade we have banned or placed ridiculous tariffs on textiles, furniture, toothpicks, fruit juice, cement, rice, wheat, cars, plastics, noodles, etc etc and yet there is not one industry that is now grown.

Dangote Cement has 50% profit margins, and we have cement that is twice as expensive as the world average but we still have restrictions on cement. The Chi group is a $500m company primarily off the fruit juice ban, fruit juice is still banned. Dufil Prima the makers of indomie are rumoured to be worth anywhere between $600m - $1 billion, and yet noodles are still banned. Apparently these industries are still struggling and need to be protected.

And what about those industries that after years and years of bans nothing has changed - how many furniture giants do we have, who's the toothpick magnate, where are the textile mills employing tens of thousands of workers. These are industries where the infants weren't even born and yet they are still being protected. Who knows maybe if we give it another ten or even twenty years they will rise up again.

I have a lot of sympathy for the Infant Industry idea but for goodness sake we need to put time limits on this thing. This perpetual infancy thing a'int gonna cut it. Let them mofos grow up yo (random urban alert)

Laters

snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-66278535123063435992014-03-31T15:14:00.000+01:002014-03-31T15:14:19.854+01:00Some Agriculture GuffGenesis of this Post
So a twitter conversation on power meandered off into agriculture which led to the discussion of doreo partners. I hadn't heard of them before today, but hello google. Doreo Partners is an interesting group. The are an impact investment fund but their main focus seems to be the creation of a value chain of certain agricultural products that are important to the FMCG multinationals investing in Nigeria. HBS did a hagiographic piece about them and other HBS alum that are doing interesting things in Africa.

Execution Execution Execution
It's an interesting piece that provides a lot of information about how some very smart people are thinking about agriculture. Though most of it boils down to "find a multinational to buy a product" "develop a value chain around it" "establish a smallholder grower scheme" "$$$". Now as I say ideas are a dime a dozen and this one has been around for a long time (despite what HBS says about the "pioneering nature of the idea" - massive eyeroller that). However all the people in the HBS article are actually executing which is very hard in general, and very very very hard in agriculture so the eye rolling is minimal and goes hand in hand with clapping, and handwaving and a little bit of cheering.

Scalable
The beauty of the value chains that these entrepreneurs are building is that they are scalable to a large degree. You can see them starting out with crops that the local multinationals want, and moving onto crops for export, and then onto products for the local market without offtake. You can also see them owning the attendant distribution facilities. It's too early for private equity money for a lot of these, but there are going to be interesting conversations going on in 3 - 5 years.

Somebody's Gonna Be Filthy Rich
Agriculture is 40% of Nigeria's GDP. Which is about $120 billion. However Agriculture is largely informal so there is an argument to be made that it is probably about 50% larger than that even before we talk about GDP rebalancing that's supposed to increase our overall GDP (including agriculture) by another 50%. The guys and gals that make it out of this agric entrepreneur pool are going to capture a few billion dollars sized chunk of this value. And that's ok. This is the kind of wealth that receives no objections from me because it transforms nations. Well apart from the people who are doing rice cos those rice subsidies majorly suck. At this point I should point out the juggernaut that is Dangote is capturing some of this wealth. He is using his firms to provide the offtake and backward integrating in to sugar, fruits and tomatoes. From his perspective, it's almost a no-brainer way of making himself another $1 - 2 billion.

Public Sector Support
The NIRSAL scheme set up by CBN and the general awesomeness of the Agric Minister (yes I'm a fan what of it) meant that these budding entrepreneurs have a playing field that allows them to spread their wings. The fertiliser subsidy to the farmers and the risk sharing loans to the companies/farmers give them the ability to try new things. Still not a fan of the high tariffs on staple goods though, but that's a topic for another day.

Conclusion
The early successes of these entrepreneurs is going to lead to other people entering the space, which is a good thing. Not everybody will get the multinational pull that guarantees their offtake. They will have to go after the market women cartels and bulk buyers to get their products to the market, which is also a good thing. But that is a story for another day.

Laters.snazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-88661994583024270062014-03-27T21:46:00.001+01:002014-03-27T21:46:30.864+01:00A Little Extra on PowerThe Privatization of the PHCN Generation and Distribution assets was "officially" completed in November 2013. In the four months since the completion the power industry has lurched from crisis to crisis like a drunken sailor. This has created a lot of dissatisfaction with the privatization, and a lot of pessimism about the future of power in Nigeria. Unfortunately it is likely to stay the same, or get worse for a while before it gets better.

The problem with the power sector in Nigeria is that we have managed to neglect very many things at once. And since Power is a complex system, pretty much all those things have to be working for us to get the kind of improvements that we were promised during the privatisation.

There's a number that gets bandied about alot: 10,000MW. This is the holy grail of the Power Sector. When we hit 10,000MW then we have hit the first major milestone and we are on our way. Rather than go down the laundry list of things that have to go right for us to get to 10,000MW, I thought I'd talk on the three main things that are keeping us from 10,000MW.

Transmission
Our current grid can take 3,500MW on a good day. You try to give it anymore and it's like a mogwai you fed after after midnight (yes that's a gremlins reference for all you fellow oldies). Our transmission story is also a mix of good news bad news. Good News: The Government concessioned the running of the transmission company to Manitoba Hydro. Bad Bews: The Government is playing politics with their appointment. What they have going on there is the opposite of free reign. Good News. The Government has set aside $1 billion to expand the grid to take up to 10,000MW. Bad News: The Project Management of the EPC is a mess right now. It's unclear who exactly in is charge of this. Good news: In theory transmission grid will be significantly improved in two years. Bad News: In practice it will probably take 4 years.

So if you spend all your energy getting the transmission grid up to scratch and it can carry more electricity than you can generate by rubbing your palms together you still have to deal with:

Gas Availability
We have about 5,000MW of true installed capacity right now. We are expecting another 10,000MW of installed capacity coming from the eventually to be completed NIPP scheme. However don't dance a jig just yet, young whippersnapper. Most of these plants are thermal gas fired plants. Since you are all very bright, you are wondering whether we have the requisite cubic feet of gas to fire all these plants. Well a Very Serious Person once told me that we have enough gas to power only 5,000MW of power. Talk about a total buzz kill. The CAPEX required to drill the wells and build the gas processing facilities to strip and produce the lean gas necessary to power these plants is rather plenty. And most of the assets have this gas are the onshore IOC/NNPC JV assets. And then there were crickets. Assuming that NNPC cannot be incompetent forever (see how optimistic I am), at some point we will eventually get gas from the onshore JVs. More likely however is that the assets Shell and co have sold to the private sector will eventually produce the necessary power. Since we are being completely arbitrary I'm guessing that in about 4 years we will have enough gas to fire the plants.

Gas Infrastructure
Even if we have the gas available, we still have to get it from the processing facilities to the power plants that need it. To do that we need pipelines. Do we have the pipelines? Of course we don't. There's work going on, they are extending the existing pipelines. They are adding new pipelines. They are building gas gathering facilities to store gas and then route it where it needs to go. Who is they you ask. Well the government silly. The gas masterplan. The ambitious network of infrastructure is at least three years behind schedule. I remember knowing that this was in trouble when I heard the guy running it say that they were asked to raise private sector capital for it. The network will continue to grow, and at some point we will be able to get gas to all the power plants that need it.

Conclusion
Things could change, the government could get more efficient. We could connect it bit by bit. Sort out the ability to do 6,000MW, then 9,000MW and so on. So there may be demonstrable improvement in the next couple of years. However I just feel that 4 years is a good number based on what is on ground for there to be a step improvement on power on a national level. However there will be ways in which the private sector generation and distribution owners find a way to solve some of their their problems on a localised basis but for there to be the power that we want, it has to happen systemically. So here's hoping.

Laterssnazzyhttp://firstname.lastname@example.com:blogger.com,1999:blog-36647641.post-87620814496674739722014-03-26T14:14:00.001+01:002014-03-26T14:14:44.958+01:00On Being The Change

Introduction
For those of you living under a rock, or well I suppose those who just don't watch the Oscars, Cate Blanchett (who is awesome) gave a speech about being the change. Not in the general "lets go change the world" Ghandi sense, but in very narrow subset of change that focuses on the types of minority and female characters you see on the screen . This post is more about my personal experience in avoiding the normal expected relationships in movies (or in this case in a script). However if you want to explore the issue in depth, Emily Blake of one of my favorite screenwriter blogs (Bambokillers) did a post about that speech and the issue in general that you should definitely check out.

The germ of the idea
When I moved back home in '06 one of the things that interested me was the racial stratification of Nigerian society. You rarely saw Nigerians of Indian, Chinese and Lebanese descent mix with "native" (definitely need a better word) Nigerians. In fact a lot of "native" Nigerians did not (and still don't I suppose) consider these guys to be Nigerian. An area like this is ripe for conflict and when I was brainstorming story ideas for future screenplays a love story between two Nigerians - an Indian Lady and a "Native" Man - featured prominently.

What Almost Happened
I was initially thinking that the story will be some hybrid between Guess who's coming to dinner and Mississippi Masala. You know the story, awesome black guy falls in love with girl of other race, there are a lot of family misunderstandings and racism and then we learn that all races are the same, and we all live happily ever after. Yay.

Why It Didn't Happen.
So when I created the characters and tried to set them down this trite journey, they were like guy this isn't 1967 (Guess Who's Coming to Dinner) or 1991 (Mississippi Masala) for that matter: it's 2014. Give us a journey that isn't cliched. A journey that recognises us as individuals. A journey that is true to us and not the stereotypes that that you think you are. For a non-writer reading this, it may seem weird to be lectured (and screamed at) by your characters but I assure you it's quite common.

What Did Happen.
So after I apologised profusely to my characters I focused on writing a script that made their race incidental to the story. It took a while, but I managed to create a story where the central conflict is not generated by the fact that they are an interracial couple. It was with a great sense of satisfaction that I got to the end of the script without a "Character Learns That Racism Is Bad" moment. The script may suck (false modesty alert) for other reasons but it won't be for that.

What We Learnt Moment
I don't know if this script will ever get produced - it's a $1 million budget script minimum and Nigerian cinema is a long way from supporting that kind of budget - but I'm truly glad I didn't go down the "let's teach that racism is bad" route. There is something awesome and liberating about not doing the same ol thing: It's like base jumping off Freedom Tower - without the being arrested bit of course. So to any writers reading this, take a chance, tell stories that challenge you, but of course remember the most important thing: while you be the change, don't be boring.

Laters

snazzyhttp://email@example.com:blogger.com,1999:blog-36647641.post-4654668401090136512014-03-25T15:40:00.001+01:002014-03-26T12:10:47.643+01:005 Things on Healthcare in NigeriaIntro

This post was basically informed by a series of tweets I made about healthcare in Nigeria. Since I'm no longer anonymous on here (if I ever really was), it's no secret that I'm in finance. For a while now, I've been thinking about the healthcare sector from an investment option. Up front I should state that healthcare is a fundamental human right. Having said that, achieving that right is a public policy goal not a business goal. Anyway, PSA aside, here are a few of my thoughts about the healthcare sector.

In Theory There Is A Market

Depending on who you ask there are between 160 - 180 million of us running around. Even if you strip out the bottom 70% can't afford to pay and the top 10% who will fly abroad to get a cold treated, that leaves 20% of our population that can theoretically afford decent medical care. 20% is over 30 million people. If you cannot build a functioning healthcare system of with a potential base of 30 million people you aren't trying very hard... in theory.

Lagos, we have an Insurance Problem

Forgive the corniness of the header but hey, I kinda liked it. Healthcare is one of those things that is pretty much an inelastic good. Your demand for healthcare is not determined by the price. If you can afford it, you will pay for it. As a result, unless you are very rich you are generally not equipped to pay for healthcare out of pocket because you cannot predict if, when and how bad. However those characteristics make healthcare a no-brainer for insurance.

Most nations go down a version of the government led single payer route (like the UK, Canada), some go down the private sector led route (like the US, Switzerland). Regardless of the route you take it should work for the majority of your population (this is my healthcare as a human right thing). The reason why insurance is important is that it allows hospitals to treat patients without worrying about the costs of the treatment. That creates a different problem about cost management, but that's not the topic of this post. If we are worried about cost management in Nigeria, we have done very very well.

So Nigerian Medical Insurance. In Nigeria we have a mixture of Government Insurance (NHIS) and Private Insurance. And as comes as no surprise to most of you, neither of them is working.

The Government system was actually set up as a single payer system, but the implementation leaves a lot to be desired. All working Nigerians are supposed to contribute but compliance is low. Also the FG is not making up the compliance short fall. As a result NHIS is badly funded, which means that the payments to doctors are very low. It also attracts the sickest patients most of whom cannot pay if NHIS doesn't and as a result the whole thing is caught in the insurance death spiral. As we speak a lot of private hospitals refuse to take NHIS patients.

The Private system is bad for a different reason. It is generally good with dealing with low to mid tier problems, but is utterly useless in dealing with big problems. The plans will pay for you to get your malaria medicines, and maybe even your appendix removed, but it won't pay for a serious operation. In a way it's the opposite of catastrophic insurance which lets you pay for the small stuff and covers the big stuff. So from a hospital perspective, private insurance is half pregnant. Emergency care is the most expensive and that is the stuff that the plans don't cover.

Basically if you were going to do healthcare and were relying on insurance to pay, you are up shit creek without a paddle.

The People Pay (Badly) For Healthcare

Since insurance doesn't pay for healthcare the patients have to. And because healthcare is lumpy, people cannot plan for it. We've all seen the effects. The Family member or Driver's urgent personal appeal. The Church Prayer session. The social media fundraise. All because the system is not set up to pay for these emergency conditions and shunts the solutions onto the sick.

This means that all promises of payments are not worth the paper they are printed on. And as such if you treat patients that do not have their money upfront, you are likely to drown in a flood of unpaid bills. Since the owners of most private hospitals are rational human beings, their hospitals have adopted a "no fee no service" approach. We treat you according to your advance. Once your money finishes, out you go.

You cannot build a viable health care sector on such shaky ground. It is no surprise to discover that almost every healthcare institution in Nigeria is struggling.

The Mecure Experience

Most people who use diagnostics services in Lagos have heard of Mecure Diagnostics. Mecure own a chain of diagnostics centres in Lagos and in a few other states. Diagnostics is the lowest risk area of healthcare from a payment perspective. After all if people do not pay, they do not get their scans. However there were questions about the patronage. Will there be enough people to justify the machine costs? Since no one could answer that, it is hard to attract institutional capital. What the owners of Mecure did, was take that risk. They believed that enough people would use the service if they made it affordable, so they used their own money and established a centre in Oshodi. The success of that centre has led to another one in Lekki. The success has also led to stat government partnerships. Mecure has also built facilities for state governments in areas where they feel that may not be worth taking the risk on traffic. What Mecure has done is establish a model for investing in diagnostics centres. Now if Mecure wanted to raise money to expand diagnostic centres they have the track record that shows that diagnostic centres are viable. The key thing was that they took the equity risk.

Friends, Family and Fools

The Mecure experience fits the standard venture capital model.

Prototype. Commercialise. Scale.

Most people think this applies to tech, cos of the whole Silicon Valley stuff, but it applies to new sectors. And in Nigeria, healthcare is a new sector. We are still at the prototype phase. The viable healthcare model is yet to be built. Men and Women are needed to risk their time and their capital (and that of their friends and family) to figure out the best way to deliver cost effective, affordable healthcare. It's not time for institutional investors in healthcare yet (though I'm sure some will invest).

Startups are all about iteration, and medical startups are expensive. It will cost a lot of money to figure out what works. I'd figure that a successful start up will have spent somewhere in the region of $5 million to $10 million before it is in a position to attract institutional funding. The ideal founder group in my head is 10 doctors contributing $1 million each.

If I had to guess I'd say that the model that will eventually work is one that integrates a diagnostic centre, a full service hospital and an insurance wraparound and makes it all affordable. Something like a cheaper version of Reddington, or a larger US style private practice.

Conclusion
So there you have it. My long, rambling thoughts on healthcare in Nigeria. The one thing I didn't touch on was the brain drain issue. Because in my opinion it is a symptom of the problems, not the cause. If we fix the model, the doctors will return. Aiight. I'm done.

Laterssnazzyhttp://email@example.com