Case Write-up I
Growing Competence through Innovation Part I

Naivety, wrong assumptions and lack of experience can be used to describe the young entrepreneur, Monique Maddy during her first business venture in Tanzania, Africa. There, she attempted to apply her educational background in order to create a new telecommunication system and grow rapidly. Based on her mismanagement, unanticipated events and insufficient funds, she had to give up her visions of spreading economic prosperity throughout the country. As most of African countries, Tanzania was ruled by the British supremacy for decades until it became independent in 1964. In 1993, Maddy initiated her entry with her company “Adesemi”, to provide information technology to lower- and middle- income people. Even though, the country was relatively politically stable, the historical past guaranteed flaws in its executive, legislature and judiciary branches. Maddy encountered throughout her business venture journey some main obstacles dealing with insufficient investor funds, Tanzania’s local government, and a malfunctioning employee structure. Monique Maddy, born in Tanzania, gained her education from renowned universities such as Hopkins and Harvard Business School in the late 1980’s and with this, separated herself from the great majority of her fellow countrymen. With the initial market research analyzes funded with $50K investor cash, provided Maddy with extremely superficial results. Examining the business venture from a wide angle, she based her decisions on the overall Tanzanian reputation of a flourishing and foreign business friendly environment. The idea was promising. By placing pay phones in the country and enabling people to use services through paid beeper, customers received alerts for incoming voice mails. 50.000 daily calls, 400 pay phones in the city of Dar es Sallam and excellent channel distribution could be attributed to Adesemi’s first year. Nevertheless, Adesemi’s management faux pas, made a successful continuing impossible. Important business partner connections were lost while trying to find investors overseas willing to pump additional funds for expansion. A major wrong assumption of basing the company’s revenues on commissions from the national phone company, made Maddy dedicate most of her time towards finding investors, both governmental and private, who are in general reluctant investing into emerging countries. This situation of cash being delayed and not present when needed was supported by set backs through the government. Adesemi experienced several drawbacks dealing with Tanzania’s legal framework and workforce. Business partners, especially in an unfamiliar market, are important in order to gain access to customers habits, and get connected to key government and industry sections. Business players hired by Adesemi, swtiched to the competition only a short period after having started . Others claimed to be a valuable assets for bringing the company and government closer to each other. This demonstrated that, an emerging market work force is unreliable and a potential risk to the well-being of the company. Furthermore, the government proved to block any relationship with companies not contributing to their “sets of value”. Ademesis’s licensing agreements were rejected since they failed to comply with corruptive payments. This resulted in the company to be in doubt of its moral and legal standards.
For the selection of Ademesi team, Maddy did not carefully plan out how her future employees would work together. The workforce consisted of individuals from different countries, who met the company’s skill requirements, but their cultural differences proofed to complicate their working together. Employee’s different point of views, grew to a major company issue, which needed to be taken care of. This was mainly Maddy’s task, which disrupted her operations.
Maddy represents a stereotypical intelligent entrepreneur with insufficient experience, who bases her reasoning on learned material from University. Her venture was doomed to fail after investing only a sum of $50.000 in market research. After getting the results, she should have started thinking critically about the countries history and potential obstacles she would face throughout her journey. One paramount mistake was the fact of tackling this business venture without enough funds. Only with the time, she realized that more cash was needed in order to survive and support current as well as future investments. She declared herself a “full-time fund-raiser” in the initial and crucial phase of the business. Managing the core company was almost impossible and for this reason lost significant partnership deals. In addition to this, Maddy partnered with a University section mate with previous experience as a consultant, based his competence level on his relax personality and the fact of him enjoying safaris in Africa. A multi national experienced CEO, having dealt with emerging markets could have been a more valuable asset. Concerning her employees, Maddy should have invested significantly into finding an appropriate head of human resource to handle the employment process. Being in an African country, companies cannot rely on their intuition and HBS books to create a well functioning employee environment. Any possible problems, such as cultural difference, language barriers and international labor working in a different country should be eliminated. This is why, she should have focused on finding high skilled, trained labor from equal ethnic backgrounds who represented her success visions. It is extremely contra productive to waste precious resources and time to handle disturbances in the company caused by employee dysfunctions.
A company seeking to primarily make a profit in another country must abide to the governments rules. It is patently obvious, that current Tanzanian government officials are blocking Ademesi from solving the license issue and getting an equitable contract with the World Bank. Especially as a foreign start- up company, things should not get more difficult then they are. In order to cut off a great burden of dealing with the government, she should have left aside her moral values and go with the flow. Her last resort of branching out to different countries gave her main investor, Commonwealth Development Corporation, the sign to give up on her. This could have been avoided by paying the necessary briberies and start making a profit.
Even though, she represented an innovative mind, her arrogance and naivety mostly contributed to the company’s downfall. She heavily relied on her knowledge acquired from university and did not view the Tanzanian country as a hostile environment. Her bad planning resulted into too many obstacles, which became greater problems throughout time, in addition to her fatal commission assumptions. On average entrepreneurs lack one quality or have one most pronounced. Over-confidence generated due to her past education probably was the reason for her ill-conceived business venture strategy.