Lessons from a trader in Dubai

I came across this on Strive Masiyiwa's page and thought what a clever little story and decided this was definitely worth sharing.

In the days when Dubai was just a simple trading post, there were two brothers. The older of the brothers had been a very strict incorruptible customs official all his life.

The younger brother was a free-wheeling and sometimes corrupt businessman trader who wandered around the Middle East buying and selling contraband.

It so turned out that one day the older brother was assigned to manage a border post, and low and behold he saw his brother arriving with 20 camels, each loaded to the hilt with merchandise.

“My crook!" the older brother told his officials. “I will show him no mercy if you catch him with contraband. I want you to search those camels and confiscate anything being smuggled.”

For hours the brother’s camel train was searched and they surprisingly found that everything was perfectly in order!

The brother was allowed to go through.

The following month, the brother returned and went through the same ordeal as the officials tried to catch him for smuggling. It went on for years, with the younger brother always able to show proof that he had not smuggled anything. Meanwhile he just got richer and richer.

The older brother was promoted in his own job, and eventually retired from the civil service with total honor. His brother got richer and more powerful, and eventually their relationship improved somewhat.

It came time for the elder brother to die, and he called his younger brother to his death bed.

“Let me die in peace, my brother. I need to know the truth from you. I know you are an unrepentant scoundrel, though you are my brother. I’m now retired and there is no harm I can do to you. Just tell me the truth..."

"What were you smuggling?”

“Camels,” the brother replied.

Lesson:

Now obviously the lesson is not to imitate the younger brother but rather to learn to understand the business someone is engaged in, and how that business makes money.

Take a step back and think to yourself do you know how companies like Snapchat, Twitter or Instagram make money? If you do would you be able to replicate the model to make money for yourself? Keeping in mind knowing and understanding are two different things.

But someone will say I don't know how electricity works but I know how to use it. Yes, that is true and it is possible for people to coast or get by for a while on limited knowledge. But what you will find is that others with the know how will consistently make millions just from doing a little extra homework here and there.

Now whilst I'm not saying you have to know everything about everything, however in the area that you want to do business you must be able to articulate your business model well and become an expert in that domain so that you can meet your customers need.

The global economy is increasingly being dominated by companies with a scale and capacity that has no historical equivalent. More importantly in Africa we need to increase the conversation around scale and building producer driven scalable businesses. For this we require sufficient knowledge.